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.
