The Securities and Exchange Commission is preparing to release an “innovation exemption” for tokenized stocks as soon as this week, Bloomberg reported on May 18, in a move that could open the door to on-chain trading of public company shares on crypto platforms. The proposal under SEC Chair Paul Atkins would let qualifying venues offer digital versions of equities under a lighter compliance regime, and people familiar with the matter said the framework may permit third-party tokens that track share prices without the issuer’s consent. The shift arrives as the tokenized stock market has climbed to $1.4 billion in distributed value, up roughly 30% over the past 30 days, according to RWA.xyz data.
A tokenized stock is a blockchain-based digital token whose price tracks the value of a publicly traded share, often without granting the holder traditional shareholder rights such as voting or dividends.
Key takeaways
- The SEC is expected to release a tokenized stock “innovation exemption” as early as this week, per Bloomberg’s May 18 report.
- The framework may allow third-party tokens to track public company shares without the issuer’s consent, an unusually permissive stance.
- Tokenized stocks now total $1.4 billion across 2,246 assets, with Ondo Finance holding a 59.77% market share, RWA.xyz data shows.
- DTCC, Nasdaq, and NYSE have all announced tokenized securities plans for 2026, signaling broad Wall Street alignment.
Published: May 19, 2026, 16:00 UTC
Why an exemption, and why now
The exemption is the clearest application yet of Atkins’ “Project Crypto” agenda, an effort to migrate parts of U.S. capital markets onto blockchain rails through targeted regulatory carve-outs rather than full rulemaking. Commissioner Hester Peirce and Atkins first sketched the structure in February, describing a temporary regime with volume caps, white-listed counterparties, and automated market makers operating under SEC oversight while permanent rules are written.
Bloomberg’s sources said the framework would let crypto-native venues, including platforms like Coinbase, list tokenized U.S. equities without full broker-dealer registration during an experimental window. That structure would functionally separate tokenized trading from the existing equity market plumbing built around the Depository Trust & Clearing Corporation and FINRA-registered brokers.
The decision to allow tokens issued without the underlying company’s consent is the proposal’s most contentious element. It means a third party could mint a token tracking Apple or Tesla shares and list it on a decentralized exchange, leaving holders with price exposure but no claim on the underlying equity.
What it means for the market
The on-chain equity market has been growing without an SEC framework, and that growth shaped the proposal. Tokenized stocks reached $1.4 billion in distributed value across 2,246 assets, with monthly transfer volume of $3.24 billion and a holder base of about 265,000 wallets, per RWA.xyz. Ondo Finance leads with $883 million in tokenized equity value, while Backed Finance’s xStocks ranks second at $404.5 million.
Wall Street is moving in parallel. DTCC plans limited production tokenization trades through its DTC tokenization service in July 2026, with a broader rollout slated for October. Nasdaq disclosed an equity token design in March, and NYSE announced a tokenized securities trading and settlement platform in January. An SEC exemption that legitimizes the crypto-native side would force the two tracks, regulated equity infrastructure and DeFi-native venues, to compete for the same flow.
For traders, the immediate consequence is more venues offering U.S. stock exposure 24/7 with on-chain settlement. For developers, it opens a regulated path to building equity-linked DeFi primitives, including lending against tokenized equity and on-chain options. For traditional brokers, the exemption pressures the broker-dealer registration moat that has historically protected the equity-trading franchise.
The pushback
Industry critics have already drawn the line. Brett Redfearn, president of tokenization firm Securitize and former director of the SEC’s trading and markets division, told Bloomberg that allowing unauthorized third-party tokens could fragment price discovery. “If third parties can tokenize Apple or Amazon without the issuer at the table, there’s no theoretical limit on how many wrappers of the same company exist at once,” Redfearn said.
The Securities Industry and Financial Markets Association warned that the lack of interconnectivity and price transparency between tokenized and traditional markets could leave order flow “disorderly.” Citadel Securities and SIFMA have separately argued that broad exemptions risk weakening know-your-customer and anti-money-laundering protections that apply to registered broker-dealers.
The exemption’s status as a temporary sandbox, rather than a finalized rule, gives the SEC room to retract or tighten conditions if those concerns materialize. The agency has not confirmed a release date.
What to watch next
The release itself is the first checkpoint. Sources told Bloomberg the unveiling could come this week, which would set the volume caps, eligible venues, asset-class boundaries, and any issuer-consent requirements. The second checkpoint is exchange response: Coinbase, Kraken, and Robinhood have all signaled interest in tokenized equities, and the first venue to file under the exemption will set the early competitive template. The third is DTCC’s July rollout, which will reveal whether the regulated infrastructure can match the speed and cost of on-chain venues operating under the new exemption.
Frequently asked questions
What is an SEC “innovation exemption”?
An innovation exemption is a temporary regulatory carve-out that lets approved firms operate outside specific securities rules under SEC oversight. The tokenized stock version would create a sandbox where venues can list digital versions of equities without full broker-dealer registration, while the SEC studies the activity and develops permanent rules.
How are tokenized stocks different from regular stocks?
Tokenized stocks are blockchain-based tokens whose price tracks a public company share. They typically do not carry voting rights, dividend access, or registered ownership of the underlying equity unless the issuer or platform explicitly provides them. Settlement happens on-chain rather than through DTCC, often in seconds rather than the standard T+1 cycle.
Who currently dominates the tokenized stock market?
Ondo Finance leads with $883 million in tokenized equity value, a 59.77% market share. Backed Finance’s xStocks product is second at $404.5 million, representing 27.38% of the market. Distributed value totals $1.4 billion across 2,246 assets, with monthly transfer volume of $3.24 billion, per RWA.xyz.
