US SEC poised to allow stock token trading in potential market shakeup

By Hannah Lang

NEW YORK, June 17 (Reuters) - U.S. equity markets look a imaginable shakeup arsenic the Securities and Exchange Commission readies a caller argumentation that would let crypto companies to connection blockchain-based stocks, analysts and lawyers said.

The crypto manufacture says tokenized stocks — blockchain-based instruments that way accepted ‌equities — could revolutionize banal markets by allowing shares to beryllium traded 24/7 and settled instantly, boosting liquidity and reducing transaction costs.

Crypto manufacture insiders expect President Donald ‌Trump's SEC chair, Paul Atkins, to unveil an "innovation exemption" soon. Atkins has said this would let companies to experimentation with caller integer plus concern models without having to comply with each of the SEC's disclosure ​and investor-protection rules. Most notably, the exemption is expected to let firms to connection trading successful tokenized versions of existing U.S. stocks.

CRYPTO EXCHANGES READY TOKENIZED STOCKS

Prominent crypto players including Coinbase person signaled that they program to motorboat tokenized stocks successful the United States erstwhile the rules allow. Robinhood, Kraken and respective different crypto exchanges already connection tokenized stocks overseas, portion Coinbase connected Tuesday announced it would soon motorboat specified products extracurricular the U.S.

While Atkins has antecedently said the innovation exemption volition beryllium impermanent and limited, implicit the agelong word it could pave ‌the mode for large structural changes to equities markets, ⁠bringing specified crypto upstarts into nonstop contention with accepted brokerages similar Morgan Stanley's E*Trade and Charles Schwab, said analysts and attorneys. Some regulatory experts and accepted Wall Street companies person warned that tokenized banal trading could make caller risks for the strategy and investors, depending ⁠on however the exemption is structured.

The combined planetary worth of tokenized nationalist stocks geared toward retail investors has grown rapidly since the extremity of 2024, erstwhile the marketplace was worthy conscionable a fewer cardinal dollars, according to RWA.xyz, which tracks tokenized assets. The marketplace capitalization of tokenized stocks present stands astatine much than $6.4 billion, according to information supplier CoinMarketCap.

Ladan Stewart, the planetary ​head ​of fintech and a spouse astatine White & Case, said the innovation exemption would beryllium a "significant win" ​for the crypto industry. It could perchance let crypto firms to ‌perform assorted banal marketplace functions simultaneously, similar commercialized execution and clearing, without complying with the afloat acceptable of rules applicable to SEC-registered intermediaries similar exchanges and broker-dealers, she added.