SEC Grants Temporary Exemption for Tokenized Stock Trading on Blockchain

The US Securities and Exchange Commission (SEC) has approved a temporary, conditional exemption for Tokenized Securities Venues (TSVs) to trade tokenized shares of US stocks. This decision, announced by Commissioner Mark Uyeda on September 17, is part of the SEC's initiative to explore how blockchain technology can be integrated into securities regulation.

Under the new framework, TSVs can operate using the Innovation Exemption, allowing them to execute trades of tokenized National Market System (NMS) stocks through permissioned automated market maker (AMM) liquidity pools on public blockchains. This exemption is designed to modernize the trading process, potentially lowering costs and improving market transparency.

Key features of the exemption include:

• TSVs can operate on permissioned liquidity pools, meaning only vetted participants can trade or provide liquidity.
• Tokens must confer the same rights as traditional stocks, including dividends and voting rights, while synthetic tokens that do not convey these rights are prohibited.
• Regular public disclosure of transaction data, including prices and volumes, is required to enhance transparency.
• Specific conditions apply to liquidity providers, including compliance with volume caps and recordkeeping requirements.

This temporary framework is set for five years, allowing the SEC to gather data and feedback on the operation of these venues. The Commission aims to evaluate the impact of tokenized trading on market integrity and investor protection, especially in light of recent legislative challenges regarding digital asset classification.

Commissioner Uyeda emphasized the importance of balancing innovation with regulatory oversight, aiming to prevent the opacity that has affected parts of the decentralized finance ecosystem. The SEC's approach reflects a commitment to adapting regulatory frameworks in response to technological advancements in financial markets.

New Facts on Tokenized Stock Trading

• The market for tokenized traditional assets has surpassed $35 billion in total onchain value, nearly tripling since the GENIUS Act was signed into law in July 2025.
• US Treasury products dominate the tokenized asset landscape, with commodities, primarily gold, accounting for approximately $5 to $6 billion of the total market value.
• In mid-2024, the non-stablecoin tokenized asset market was valued at below $3 billion, which has since grown more than tenfold by mid-2026.
• The upcoming Clarity Act, expected to be voted on around mid-September 2026, aims to provide regulatory clarity specifically for tokenized assets.
• Tokenized Treasuries offer significant advantages with onchain settlement occurring in minutes compared to traditional settlement which takes a day, enhancing capital efficiency for institutions.
• Tokenization of gold reduces costs related to storage, insurance, and transportation, while maintaining its role as a portfolio hedge.
• Private credit tokenization allows for fractional ownership and secondary market trading, broadening access to this typically illiquid asset class.

New Developments in Tokenized Stock Trading

On September 17, 2026, Abra announced an expansion of its partnership with Fireblocks to introduce strategy tokens into a regulated qualified custody structure.

Strategy tokens are synthetic assets wrapped in smart contracts that automate trading strategies to generate yield for holders. These tokens will be issued by AbraFi Labs and will reside in clients' separately managed accounts (SMAs), ensuring fiduciary responsibilities are maintained.

The integration with Fireblocks Trust Company, regulated by the New York State Department of Financial Services, allows for automatic routing of newly issued strategy tokens into custody, enhancing security and compliance.

Qualified custody is crucial as it mandates that registered investment advisers hold client assets with qualified custodians, ensuring legal possession of keys and maintaining audit trails.

The initial rollout will support a select group of strategy tokens, with plans for expansion as the framework develops.

New Developments on SEC Exemption for Tokenized Stocks

Michael Saylor, CEO of Strategy Inc., has revealed that the SEC's innovation exemption allows for 24/7 on-chain trading of $STRC and $MSTR through qualifying venues. This comes amidst ongoing discussions about the SEC's regulatory framework for tokenized securities, which has experienced delays.

Market participants currently show a 73% likelihood that $STRC will reach $100 by December 31, indicating optimism regarding its potential. Observers are keenly awaiting any official announcements from the SEC that could finalize the innovation exemption framework, as these developments could significantly influence STRC's market activity and price movement.

As the year-end approaches, further updates could alter the current market dynamics, particularly with the December 31 sub-market priced at 73% YES.

New Developments on Tokenized Stock Trading

• The SEC has approved on-chain stock trading while prohibiting synthetic tokens.
• Trading venues must ensure that token holders have the same rights as ordinary shareholders.
• Tokens must be verified by the company before listing, allowing the company to object.
• Access to trading is limited to approved participants, with caps on symbol counts and volumes.
• The temporary relief from the SEC is set to expire in five years.
• Robinhood has begun offering voting rights and redemption options for its tokenized stocks.
• Johann Kerbrat from Robinhood described the SEC's innovation exemption as a significant step for onshore liquid tokenized securities markets.
• The SEC is seeking public comments before establishing permanent rules.