- The SEC is reportedly preparing to allow blockchain-based trading of tokenized shares on regulated crypto platforms.
- Nasdaq, Coinbase and others are pushing for tokenized equities as adoption accelerates.
- Tokenized stock markets could reach $1.3 trillion if 1% of global equity moves onto blockchains.
The U.S. Securities and Exchange Commission (SEC) is said to be developing a proposal that would permit trading of blockchain-registered versions of publicly listed shares on crypto exchanges, signaling a potential breakthrough in integrating digital asset technology with traditional markets.
According to The Information, if approved investors would be able to buy and sell tokenized shares of publicly traded companies on regulated crypto platforms.
Although the plan is still in an early stage, it underscores growing regulatory openness toward tokenization — the process of creating blockchain-based tokens that represent ownership of traditional assets.
Regulators signal openness to innovation
SEC Chair Paul Atkins recently described tokenization as an “innovation” that the agency should encourage rather than stifle.
“We should focus on how to foster innovation in the markets,” Atkins said, suggesting tokenized assets could broaden access to financial markets and lower costs.
The initiative comes amid accelerating momentum in the industry.
Nasdaq has filed with the SEC for rule changes that would allow it to list tokenized securities, while Coinbase is reportedly seeking regulatory approval to offer tokenized shares on its platform.
Retail platforms such as Robinhood and Kraken have also begun offering tokenized equity products to users.
This development highlights a wider shift among regulators and market participants toward adopting blockchain technology in securities markets.
Significant questions remain, however, around market structure, investor protection and oversight as tokenization moves closer to the mainstream.
Pushback from traditional finance
The SEC’s apparent willingness to explore tokenized shares has drawn criticism from established financial firms.
In a letter to the SEC’s crypto working group in July, Citadel Securities urged regulators to ensure tokenized securities create real market value rather than exploiting regulatory loopholes.
“Tokenized securities must succeed by delivering genuine innovation and efficiency to market participants, not by taking advantage of regulatory blind spots,” the firm warned.
That skepticism reflects broader tensions between traditional finance and the emerging digital asset sector.
While tokenization promises faster settlement, greater transparency and lower costs, critics caution about potential risks if the technology develops without clear safeguards.
Tokenization of equities gains momentum
Despite concerns, tokenized shares are gaining traction.
Industry data indicate more than $31 billion in assets have been tokenized, though equities account for only about 2% of that total.
Still, the value of tokenized equities has nearly doubled over the past 100 days, suggesting accelerating adoption.
A recent Binance Research report compared the rise of tokenized equities to the early growth of decentralized finance (DeFi) in 2020 and 2021.
The report suggests tokenized shares could soon reach a tipping point toward broader hybrid finance, where blockchain technology operates alongside traditional markets.
Binance estimates that tokenized equity markets could ultimately exceed $1.3 trillion if just 1% of global equities move onto blockchain networks.
As regulators weigh next steps, market participants are watching the SEC’s forthcoming proposal closely.
The outcome could determine whether tokenized shares remain a niche offering or evolve into a transformative force in global equity markets.