SEC Introduces Innovation Exemption for Tokenized U.S. Stocks
- The SEC has launched the “Innovation Exemption,” allowing qualifying “Tokenized Securities Venues” to trade tokenized U.S. stocks on permissionless blockchains without registering as national exchanges.
- This exemption is effective immediately and will last up to five years, covering only genuine tokenized stocks with full rights like dividends and voting.
- Issuers have a right to object within a 30-day period if they do not consent to third-party tokenization of their shares.
- The initiative aims to create a compliant pathway for onchain trading of U.S.-listed stocks using automated market makers and liquidity pools.
The SEC’s new exemption provides a temporary bridge toward permanent rulemaking, potentially positioning DeFi platforms in direct competition with traditional exchanges by facilitating the trading of tokenized equities on public blockchains.
By allowing certain firms relief from dealer registration requirements, the SEC aims to accelerate the adoption of tokenized markets while ensuring issuer protections against unauthorized third-party tokenization are upheld. (Source)
