- SEC eyes plan to allow blockchain-based stock trading on approved crypto platforms.
- Nasdaq, Coinbase, and others push for tokenized equities as adoption accelerates.
- Tokenized stock market could hit $1.3T if 1% of global equities move to blockchain.
The US Securities and Exchange Commission (SEC) is reportedly developing a proposal to allow blockchain-registered versions of stocks to trade on cryptocurrency exchanges, signaling a potential breakthrough in the integration of digital asset technology into traditional markets.
The move, if approved, would permit investors to buy and sell tokenized shares of publicly traded companies on regulated crypto platforms, according to The Information.
While the plan remains in its early stages, it underscores the growing regulatory openness toward tokenization — the process of creating blockchain-based tokens that mirror ownership of conventional assets.
Regulators signal openness to innovation
SEC Chair Paul Atkins recently described tokenization as an “innovation” the agency should promote rather than restrict.
“We should be focused on how do we advance innovation in the marketplace,” Atkins said, suggesting that tokenized assets could enhance accessibility to financial markets while lowering costs.
The initiative comes amid increasing industry momentum.
Nasdaq has filed for SEC approval of a rule change that would allow it to list tokenized securities, while Coinbase is reportedly seeking regulatory clearance to offer tokenized equities on its platform.
Retail platforms such as Robinhood and Kraken have already begun rolling out tokenized stock products to users.
These developments highlight a broader shift among regulators and market operators toward embracing blockchain technology in securities markets.
However, significant questions remain about market structure, investor protections, and oversight as tokenization moves closer to the mainstream.
Pushback from traditional finance
The SEC’s apparent willingness to explore tokenized equities has drawn criticism from established financial institutions.
In a July letter to the agency’s Crypto Task Force, Citadel Securities urged regulators to ensure that tokenized securities create genuine value for markets rather than benefiting from regulatory loopholes.
“Tokenized securities must achieve success by delivering real innovation and efficiency to market participants, rather than through self-serving regulatory arbitrage,” the firm cautioned.
This skepticism reflects a broader tension between traditional finance and the emerging digital asset sector.
While tokenization promises faster settlement, greater transparency, and lower costs, critics warn of potential risks if the technology advances without clear safeguards.
Stock tokenization gains momentum
Despite concerns, tokenized equities are gaining traction.
According to industry data, more than $31 billion in assets have been tokenized, though stocks represent only about 2% of that total.
Still, the value of tokenized equities has nearly doubled in the past 100 days, suggesting accelerating adoption.
A recent report from Binance Research compared the rise of tokenized stocks to the early growth of decentralized finance (DeFi) in 2020 and 2021.
The report suggested that tokenized equities could soon reach an “inflection point” in the broader shift toward hybrid finance, where blockchain technology coexists with traditional markets.
Binance estimates the market for tokenized stocks could eventually surpass $1.3 trillion if just 1% of global equities migrate onto blockchain networks.
As regulators weigh next steps, the SEC’s forthcoming proposal will be closely watched by market participants.
Its outcome could shape whether tokenized stocks remain a niche product or evolve into a transformative force in global equity markets.
