SEC Discusses "Gradual" Regulatory Path for Tokenized Securities, Plans to Introduce Innovative Exemption Mechanism

Odaily News: Paul Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), and Commissioner Hester Peirce stated that the regulatory body is considering introducing an "innovation exemption" for on-chain securities. This initiative aims to promote the adoption of tokenized securities in the U.S. capital market in a gradual manner.

Atkins pointed out at the ETHDenver event that this exemption mechanism would allow limited trading of certain tokenized securities on new platforms, while accumulating practical experience for the establishment of a long-term regulatory framework. Peirce reiterated that tokenized securities are inherently still within the scope of securities and should be advanced cautiously under the existing legal system.

Over the past year, traditional financial institutions including Nasdaq and DTCC, as well as several crypto companies, have explored tokenized stock businesses. If the SEC approves the relevant path, crypto platforms may be able to offer blockchain-based traditional stock trading, creating competition with traditional brokerages.

Currently, global demand for tokenized stock trading continues to heat up. Kraken reported that the cumulative trading volume of its xStocks product has reached $25 billion; Robinhood's RWA blockchain project also saw its trading volume exceed 4 million transactions in its first week of launch. The SEC stated it will adopt a "step-by-step" approach to balance innovation with investor protection.