The U.S. Securities and Exchange Commission (SEC) is expected to release an innovation exemption for tokenized stocks as soon as this week, according to people familiar with the matter speaking with Bloomberg.
Key Takeaways:
The SEC, under Chair Paul Atkins, plans to release a tokenized stock innovation exemption as soon as May 18, 2026.The framework could open U.S. equity markets to platforms like Coinbase without full broker-dealer registrations.The exemption follows Nasdaq and NYSE tokenized trading approvals in March and April 2026, signaling accelerating onchain adoption.Both exchanges now allow tokenized versions of select equities and exchange-traded funds (ETFs) to trade alongside traditional shares using the Depository Trust Company’s tokenization pilot. The innovation exemption takes a different approach. Where the Nasdaq and NYSE approvals kept tokenized trading within the existing market structure, the new exemption targets broader onchain trading.
Under the expected framework, platforms may be able to offer tokenized stocks without securing full broker-dealer or exchange registrations in certain cases. The exemption is expected to include guardrails such as exposure limits, disclosure requirements, and restrictions tied to its temporary or conditional nature.
In January 2026, the SEC issued guidance clarifying that tokenizing a security does not change its regulatory classification. Federal securities laws still apply based on economic substance, meaning tokenized stocks remain subject to the same rules as their underlying instruments.
Traditional financial institutions have raised objections throughout the rulemaking process. Banks and exchanges have argued that the sandbox-style approach creates competitive imbalances and weakens safeguards around custody, anti-money laundering compliance, and market fragmentation.
The SEC has not yet published the exemption on its website. Full details, including eligible participants, scope, and specific conditions, will likely be available upon official release at sec.gov. The move fits the current administration’s broader effort to modernize market structure through joint SEC and CFTC coordination, token taxonomy work, and onchain settlement modernization.
Atkins has positioned the agency as a facilitator of financial innovation, and the tokenized stock exemption represents the clearest step yet toward allowing blockchain-based trading of regulated securities at scale in the United States.
