- The SEC is reportedly considering allowing shares represented on blockchains to be traded on approved crypto platforms.
- Nasdaq, Coinbase and others are pushing for tokenized shares as adoption accelerates.
- The market for tokenized equities could reach $1.3 trillion if 1% of global shares move onto blockchains.
The U.S. Securities and Exchange Commission (SEC) is said to be developing a proposal that would permit blockchain-registered versions of stocks to trade on cryptocurrency exchanges, signaling a potential breakthrough in integrating digital asset technology with traditional markets.
If approved, the move would allow investors to buy and sell tokenized shares of public companies on regulated crypto platforms, according to reporting by The Information.
Although the plan remains in early stages, it underscores growing regulatory openness toward tokenization — the process of creating blockchain-based tokens that represent ownership rights in conventional assets.
Regulators signal openness to innovation
SEC Chair Gary Gensler has recently described tokenization as an “innovation” the agency should promote rather than restrict.
“We should focus on how we advance market innovations,” Gensler said, suggesting that tokenized assets could improve access to financial markets while lowering costs.
The initiative comes amid rising momentum across the industry.
Nasdaq has filed rule-change requests with the SEC to allow it to list tokenized securities, while Coinbase is reported to be seeking regulatory approval to offer tokenized stocks on its platform.
Retail platforms such as Robinhood and Kraken have already begun rolling out tokenized exchange products for users.
These developments highlight a broader shift among regulators and market operators toward integrating blockchain technology into 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 apparent willingness of the SEC to explore tokenized shares has drawn criticism from established financial institutions.
In a July letter to the agency’s crypto working group, Citadel Securities urged regulators to ensure tokenized securities provide real market value rather than exploiting regulatory loopholes.
“Tokenized securities should succeed by delivering genuine innovation and efficiency to market participants, not by taking advantage of opportunistic regulatory arbitrage,” the firm warned.
The skepticism reflects broader tensions between traditional finance and the evolving digital asset sector.
While tokenization promises faster settlements, greater transparency and lower costs, critics caution about potential risks if the technology advances without clear safeguards.
Tokenization of equities gains momentum
Despite concerns, tokenized equities are gaining traction.
Industry data shows more than $31 billion in assets have already been tokenized, although equities account for roughly 2% of that total.
Still, the value of tokenized shares nearly doubled over the past 100 days, indicating accelerating adoption.
A recent Binance Research report compared the growth of tokenized equities to the early expansion of decentralized finance (DeFi) in 2020 and 2021.
The report suggests tokenized shares could soon reach a tipping point in a broader transition toward hybrid finance, where blockchain technology coexists with traditional markets.
Binance estimates the tokenized equities market could eventually exceed $1.3 trillion if just 1% of global equities are migrated to blockchain networks.
As regulators weigh next steps, the SEC’s forthcoming proposal will be closely watched by market participants.
Its outcome could determine whether tokenized shares remain a niche offering or develop into a transformative force in global equity markets.