TLDR
- The SEC is exploring a plan to allow blockchain-based versions of stocks to trade on crypto exchanges
- SEC Chair Paul Atkins described tokenization as an “innovation” the agency should advance
- Platforms like Robinhood, Kraken, Nasdaq, and Coinbase are pursuing tokenized stock offerings
- Over $31 billion in assets have been tokenized, with stock tokenization nearly doubling in the past 100 days
- Traditional finance companies like Citadel Securities have expressed caution about regulatory arbitrage
Stock tokenization is gaining momentum as the U.S. Securities and Exchange Commission (SEC) reportedly develops a plan to allow blockchain-registered versions of stocks to trade on cryptocurrency exchanges. This move would mark a major step toward integrating digital asset technology into the traditional financial system.
According to a report by The Information, the SEC is working on a proposal that would let investors buy and sell stock tokens on approved crypto platforms. These tokens are digital representations of shares in publicly traded companies, with ownership recorded on blockchain networks instead of legacy clearing systems.
The initiative is still in early stages but is gaining traction across multiple divisions of the agency. It reflects growing regulatory openness to tokenization, which creates blockchain-based tokens that mirror ownership of traditional assets.
SEC Chair Paul Atkins has taken a supportive stance on the matter. He recently described tokenization as an “innovation” that the agency should seek to advance rather than restrict. “Regulators should be focused on how do we advance innovation in the marketplace,” Atkins said.
Proponents argue that blockchain-based equities could deliver several benefits. These include eliminating multi-day settlement periods and reducing reliance on third-party intermediaries like clearinghouses. The technology could also improve access to financial markets and lower costs.
Market Players Making Moves
Interest in stock tokenization has accelerated in recent months with several major players entering the space. Platforms such as Robinhood and Kraken have begun offering tokenized stock products in overseas markets, conducting early experiments with these digital assets.
Nasdaq has requested SEC approval for a rule change that would allow it to list tokenized securities on its exchange. Similarly, crypto exchange Coinbase is reportedly seeking regulatory clearance to offer tokenized equities.
The trend extends beyond U.S. borders. Several pilot projects already exist across Europe and Asia, where regulated exchanges conduct real-time settlement of digital securities using enterprise-grade blockchain infrastructure.
Institutional adoption has gained momentum since BlackRock formed a tokenization division earlier this year. This move by the world’s largest asset manager has signaled broader confidence in blockchain-enabled finance.
Growth Potential and Concerns
According to industry data, more than $31 billion in assets have been tokenized across public and permissioned blockchains. Currently, tokenized equities account for only about 2% of that total, but their value has nearly doubled over the past 100 days.
A recent Binance Research report compared the rise of tokenized stocks to the early days of the DeFi boom in 2020 and 2021. Researchers suggested that tokenized equities “may be nearing a major inflection point in the broader transition to hybrid finance.”
The growth potential is vast. Binance Research estimates the market for tokenized stocks could exceed $1.3 trillion if just 1% of global equities move onto the blockchain.
Not everyone in the financial industry is enthusiastic about the shift. Traditional finance companies have expressed some reservations. In a July note to the SEC’s Crypto Task Force, Citadel Securities cautioned regulators to ensure that tokenization delivers genuine market benefits rather than exploiting regulatory gaps.
“Tokenized securities must achieve success by delivering real innovation and efficiency to market participants, rather than through self-serving regulatory arbitrage,” Citadel wrote.
The SEC’s plan comes as the agency balances innovation with investor protection. The proposal remains under internal discussion, with particular focus in market structure and innovation units. Former SEC officials have acknowledged that tokenization, when executed under strict oversight, could increase market transparency and improve global liquidity.
For investors seeking faster, programmable ownership models, the SEC’s next move may determine how quickly the crossover to blockchain-based securities happens.
