SEC Plans Blockchain Stock Trading as Tokenized Market Hits $1.4B

SEC Opens Path for Onchain Stock Trading as Wall Street Embraces Tokenization

The U.S. Securities and Exchange Commission is preparing to unveil a regulatory framework that could open the door for trading tokenized versions of publicly listed stocks, marking one of the most significant shifts yet in the integration of traditional finance and crypto markets.

According to a Bloomberg report, citing people familiar with the matter, the SEC may release its proposed “innovation exemption” as early as this week. The framework would create a pathway for digital representations of securities to trade on blockchain-based platforms outside conventional stock exchanges.

The initiative aligns with the Trump administration’s broader push to ease restrictions around digital assets and encourage the development of crypto-native financial infrastructure in the United States.

Under the reported proposal, third-party firms could issue blockchain-based tokens tied to the value of publicly traded stocks even without the approval or participation of the underlying companies. Those tokens would likely trade on decentralized crypto platforms rather than traditional exchanges.

Importantly, the digital assets may not grant the same rights associated with conventional shares, such as voting power or dividend eligibility. Instead, they would primarily function as instruments designed to track price exposure to listed equities.

The move represents a notable departure from the SEC’s historically cautious stance toward crypto-related securities products. It also reflects growing momentum behind tokenization, one of the fastest-expanding sectors within digital assets.

Investor interest has accelerated rapidly. According to data from RWA.xyz, the market value of distributed tokenized stocks has climbed nearly 30% over the past month to $1.43 billion across more than 2,200 assets. Monthly transfer volumes have reached $3.10 billion, while the number of holders has expanded to roughly 267,710.

Ondo currently dominates the sector with $888 million in tokenized equity value, accounting for close to 60% of the market. Rival platform xStocks follows with roughly $394 million in value.

Wall Street institutions have already moved to establish positions in the market. The Depository Trust & Clearing Corporation recently announced plans to facilitate limited production trades of tokenized securities beginning in July 2026, with broader implementation expected later in the year.

Nasdaq has also disclosed plans to develop an equity token structure, while the New York Stock Exchange is working on systems designed for on-chain settlement and tokenized trading infrastructure.

Supporters argue that tokenized securities could make markets more efficient by enabling continuous trading, faster settlement, and broader global access to equities. Critics, however, warn that fragmented liquidity, investor protections, and uncertainty around shareholder rights remain unresolved issues.

The SEC’s proposed exemption could become a defining moment for the future of on-chain finance. If implemented, it would provide the clearest signal yet that U.S. regulators are willing to integrate blockchain-based trading systems into mainstream capital markets rather than keep them at the edges of finance.