The SEC delayed its tokenized stock innovation exemption after industry concerns over implementation.
The US Securities and Exchange Commission has postponed the release of its proposed "innovation exemption" for tokenized stock trading after receiving concerns from stock exchange operators and other market participants about how the framework would be implemented, Bloomberg reported on Friday.
SEC staffers had already reviewed a draft of the proposal, which was expected to be released during that week, according to sources cited by Bloomberg. The agency has taken in feedback from hundreds of participants but has not altered the substance of its proposal.
Under the framework, platforms offering tokenized stocks would be required to guarantee investors the same rights as traditional shareholders, including voting rights and dividends. Market participants raised concerns about the possibility of unauthorized third parties issuing tokens without the consent of public companies, and about how ownership would be verified on semi-pseudonymous blockchain networks.
The delay follows remarks by SEC Commissioner Hester Peirce on Thursday, when she said the exemption would be narrow in scope and cover only digital representations of equity securities comparable to what investors can access in the secondary market today. In January, the SEC distinguished between custodial tokenized securities, which carry full shareholder rights and are held by regulated intermediaries, and synthetic versions that offer price exposure without actual ownership of the underlying shares.
The SEC has taken a more open posture toward crypto-based financial products under the current administration, a period that has coincided with growing interest in tokenization and stablecoins across Wall Street. Data from RWA(dot)xyz shows that $34 billion in real-world assets have been tokenized to date, including $1.55 billion in tokenized equities. Adoption has lagged earlier projections; Citibank forecasted in 2022 that tokenization would reach a multi-trillion-dollar scale by 2030, and McKinsey issued a similar estimate in 2024.
Several crypto industry executives publicly backed the SEC's decision to wait. Carlos Domingo, CEO of tokenization platform Securitize, said on Friday that it is important to ensure the exemption covers the right instruments, adding that getting it wrong would create a range of problems.
Tom Farley, CEO of crypto exchange Bullish, also posted on X that the SEC was recognizing the correct principle: that only public companies can issue tokens representing shares of their stock. He called on the agency to delay further if necessary to get the framework right.
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