SEC Prepares 2 On-Chain Paths for US Stocks as $1.2 Billion Tokenized Market Comes Onshore
Updated
Updated · Forbes · May 19
SEC Prepares 2 On-Chain Paths for US Stocks as $1.2 Billion Tokenized Market Comes Onshore
8 articles · Updated · Forbes · May 19
The SEC’s pending innovation exemption would open a second US route for tokenized equities, alongside the Nasdaq-DTCC model already approved in March for Russell 1000 stocks and index ETFs.
That new rail would let crypto-native platforms list tokenized equities under lighter-touch rules, including third-party wrappers that can track companies such as Apple without necessarily granting underlying shareholder rights.
The existing Wall Street rail keeps traditional market structure intact—same rights, same order books, DTC custody and T+1 clearing—while the crypto-native rail creates parallel products that may differ legally and operationally.
Offshore demand has already scaled quickly: tokenized stock market value grew from under $30 million at the start of 2025 to about $1.2 billion by year-end, with xStocks alone topping $25 billion in cumulative volume.
The split sets up broader consequences for US market structure, as SEC Chair Paul Atkins has signaled possible Reg NMS changes and issuers may soon face multiple unaffiliated wrappers of the same stock.
Will the SEC's new crypto stock 'sandbox' truly democratize finance or just introduce new dangers for everyday investors?
As the SEC opens the door to tokenized stocks, are we on the verge of a financial revolution or a regulatory crisis?