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The U.S. Securities and Exchange Commission has introduced a five-year exemption allowing qualifying blockchain-based platforms to trade tokenized U.S. stocks without being treated as national securities exchanges under specified conditions.
The relief takes effect immediately and also exempts certain liquidity providers from dealer-registration requirements when trading tokenized stocks or supplying liquidity through automated market makers.
Tokenized Venues Receive Five Years of Exchange and Dealer Relief
The framework covers qualifying tokenized securities, including blockchain-based representations of stocks. SEC guidance maintains that putting a security on a blockchain does not change its status under federal securities law.
Qualifying venues can operate without complying with many of the requirements applied to registered exchanges such as Nasdaq and the New York Stock Exchange.
Certain liquidity providers can also receive five years of relief from dealer-registration requirements when trading tokenized stocks or providing liquidity through automated market makers.
The temporary exemption will run for five years while the SEC considers longer-term rulemaking for on-chain securities trading.
Issuers Can Block Tokenized Versions of Their Shares
Platforms must notify companies before listing tokenized versions of their stocks. If the issuer objects, the venue cannot offer the tokenized security under the exemption.
Synthetic stock tokens are excluded. Products that provide derivative exposure to a company’s share price without representing an interest in the underlying security cannot use the framework.
Qualifying venues must also comply with sanctions requirements and other conditions attached to the exemption. The relief therefore removes specific exchange and dealer-registration requirements rather than taking tokenized stocks outside securities regulation.
Five-Year Framework Expands Path for On-Chain U.S. Stock Trading
The SEC announced the measure two days after the Senate failed to advance the CLARITY Act. Atkins explicitly cited Congress’ unsuccessful vote while saying the agency would move ahead within its existing statutory authority.
The exemption creates a separate temporary route for novel tokenized-securities venues alongside existing efforts to allow securities to trade in tokenized form through traditional market infrastructure. The SEC previously approved Nasdaq rule changes addressing tokenized securities in March.
Coinbase is among the crypto companies that has expressed interest in offering tokenized U.S. stocks, while several platforms already provide similar products overseas. Qualifying U.S. platforms can now use the five-year exemption while the SEC develops longer-term rules for tokenized securities trading.
