The U.S. Securities and Exchange Commission (SEC) is poised to unveil new regulations that would permit blockchain-based stock token trading, potentially as early as this week.
According to Bloomberg’s report on Monday, the SEC is developing an Innovation Exemption program. This initiative aims to implement a more flexible regulatory framework, allowing trading platforms to handle listed stocks in the form of digital tokens.
Notably, the SEC is reportedly considering authorizing the trading of third-party token securities that track stock prices without requiring consent from the listed companies. This structure would enable investors to trade tokens linked to actual stocks on blockchain-based platforms.
However, these tokens may not offer voting rights or dividend entitlements typically associated with traditional stocks.
Stock tokens are digital representations of shares issued on a blockchain. They offer advantages over conventional securities, including faster settlement times and round-the-clock trading capabilities. Industry experts suggest that the integration of blockchain technology with existing securities market infrastructure is gaining significant momentum.
In March, the SEC approved Nasdaq’s plans for tokenized securities. The Intercontinental Exchange (ICE), which operates the New York Stock Exchange (NYSE), also announced plans to expand tokenized stocks and virtual asset-linked products in partnership with the cryptocurrency exchange OKX.
The Depository Trust & Clearing Corporation (DTCC), which oversees U.S. securities market infrastructure, is set to begin pilot trading of tokenized assets in July. This move further reinforces the industry-wide shift towards blockchain-based models in global stock market infrastructure.