The U.S. Securities and Exchange Commission is putting the finishing touches on a framework that would allow digital, blockchain-based versions of publicly traded stocks to trade on crypto platforms — a move that signals how far Washington has traveled in its relationship with an industry it once treated with suspicion.

According to a Bloomberg report published Monday, the SEC plans to release an “innovation exemption” for tokenized securities as early as next week. The proposal, under development by an agency now led by Chair Paul Atkins, would create a lighter regulatory pathway for platforms offering digital representations of equities without requiring full registration compliance. The SEC did not respond to requests for comment.

What makes the framework notable is what the tokens would and would not be. Under the reported structure, third parties could issue tokens that track the price of a public company’s shares without that company’s backing or consent. 

The tokens would trade around the clock on decentralized crypto platforms. They would not carry traditional shareholder rights: no votes at annual meetings, no dividend checks, no seat at the table when a company makes decisions that affect its shareholders.

Tokenized stocks settle faster, operate across borders without the friction of legacy infrastructure, and could open equity markets to investors who have historically been locked out by geography or cost. The vision is ambitious: proponents want to put the plumbing of the $126 trillion global equity market on blockchain rails.

The absence of consent from underlying companies and the removal of shareholder protections raise uncomfortable questions about what investors are actually buying — and who is responsible when something goes wrong.

Wall Street, SEC’s embrace of tokenized products 

The SEC’s reported shift arrives at a moment when Wall Street has moved from watching tokenization at arm’s length to racing toward it. The Depository Trust & Clearing Corporation, which sits at the center of U.S. securities settlement, announced plans to begin limited production trades of tokenized assets in July, with a broader launch set for October. The DTCC’s involvement matters: it processes and safeguards the vast majority of U.S. market transactions, and its entry into tokenization lends institutional credibility to what has until recently been an experimental frontier.

Nasdaq and the New York Stock Exchange have not stayed on the sideline either. The SEC approved Nasdaq’s rule change in March to support tokenized share trading — one that preserves traditional ownership rights. 

The NYSE, whose parent company Intercontinental Exchange also struck a partnership with crypto exchange OKX, received its own SEC approval in April and is building a platform for 24/7 onchain settlement. 

The market for tokenized equities is already growing at a pace that exceeds most forecasts. Data from RWA.xyz shows the sector now holds $1.4 billion in distributed value across more than 2,200 assets — a figure that climbed roughly 30% in just the past 30 days. Monthly transfer volume has hit $3.24 billion. The holder base has grown 25% in a month to around 265,000 people.

Atkins has framed the SEC’s direction as a matter of regulatory clarity. Existing securities rules, he has argued, were designed for a world of human intermediaries and fixed trading hours — not for blockchain protocols that collapse the functions of exchange, clearing, and settlement into a single layer. The agency, he has said, should write rules rather than pursue enforcement actions to shape how these markets develop.

That argument carries weight in the current political climate. The Republican-led Senate Banking Committee advanced crypto legislation earlier this month, part of a broader effort under the current Trump administration to build a more defined regulatory framework for crypto products and digital assets.