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SEC opens five-year path for tokenized U.S. stock trading

Qualifying blockchain venues can trade limited tokenized shares without registering as exchanges, but issuer opt-outs and strict volume caps apply.

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SEC Chair Paul Atkins speaks to reporters at the New York Stock Exchange in December 2025.

TLDR

The SEC's new Innovation Exemption gives qualifying U.S. venues a five-year path to trade tokenized versions of exchange-listed stocks through permissioned blockchain liquidity pools. It is temporary and tightly limited: tokens must preserve the same dividend, voting and ownership rights as traditional shares, companies can object, and venues face symbol and volume caps. The order also requires public, auditable smart contracts and frequent transaction disclosures. It does not authorize synthetic stock products or primary offerings. The exemption took effect September 17, 2026, and expires September 17, 2031, while the SEC considers permanent rules.

The Securities and Exchange Commission has created a temporary route for limited trading of tokenized U.S. stocks on blockchain-based venues. The Innovation Exemption took effect September 17, 2026, and runs for five years.

The order gives qualifying U.S. Tokenized Securities Venues conditional relief from the Exchange Act definition of an exchange. Those venues can bring buyers and sellers together through permissioned automated market makers and liquidity pools. Certain firms supplying their own capital to those pools also receive narrow relief from the definition of a dealer.

This is not blanket approval for every crypto product tied to a stock. The SEC's 60-page order excludes synthetic exposure such as tokenized linked securities and security-based swaps. It also bars primary offerings on these venues. Eligible tokens must provide the same rights as equivalent traditional shares, including dividends, voting rights and claims on residual assets.

Venues must satisfy a long list of operating conditions. Their smart contracts must be public and auditable on a public blockchain, trading must stop when the underlying stock is halted, and transaction data must be published in a machine-readable format within 10 minutes. Companies receive notice and can object when an unaffiliated party seeks to tokenize their shares.

The trading limits are deliberately small. Tier 1 stocks are capped at 75 symbols and 0.25% of the prior month's average daily volume for each stock. Tier 2 stocks are capped at 250 symbols and 2.5%. The SEC says those limits are intended to reduce the risk that prices on the new venues drift away from prices in traditional markets.

CNBC described the action as moving the market closer to 24/7 stock trading, but the order does not promise round-the-clock access. It requires venues to disclose their business hours and leaves the framework open to public comment and possible revision before the exemption expires September 17, 2031.

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SEC opens five-year path for tokenized U.S. stock trading

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