- The SEC is reportedly preparing to allow trading of blockchain-based shares on approved crypto platforms.
- Nasdaq, Coinbase and others are pushing for tokenized stocks as adoption accelerates.
- The tokenized equity market could reach $1.3 trillion if 1% of global equities move to blockchain.
According to reports, the U.S. Securities and Exchange Commission (SEC) is drafting a proposal to permit shares recorded on blockchains to be traded on regulated cryptocurrency exchanges, signaling a potential step toward integrating digital-asset technology with traditional markets.
If approved, the measure would allow investors to buy and sell tokenized shares of publicly listed companies on regulated crypto platforms, according to The Information.
Although the plan is still in its early stages, it highlights growing regulatory openness to tokenization — the process of creating blockchain-based tokens that represent ownership of conventional assets.
Regulators signal openness to innovation
SEC Chair Paul Atkins recently characterized tokenization as an “innovation” the agency should encourage rather than restrict.
“We should focus on how we advance market innovation,” Atkins said, suggesting that tokenized assets could improve market access and lower costs.
The initiative comes amid rising momentum from the industry.
Nasdaq has asked the SEC to approve a rule change that would allow it to list tokenized securities, while Coinbase is seeking regulatory permission to offer tokenized stocks on its platform.
Retail platforms such as Robinhood and Kraken have already begun rolling out tokenized stock products for users.
These developments reflect a broader shift among regulators and market participants toward incorporating blockchain technology into equity markets.
However, major questions remain about 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 equities 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 deliver genuine value to markets rather than exploit regulatory gaps.
“Tokenized securities should succeed by providing real innovation and efficiency to market participants, not through opportunistic regulatory arbitrage,” the firm warned.
This skepticism reflects a broader tension between traditional finance and the emerging digital-asset sector.
Although tokenization promises faster settlement, greater transparency and lower costs, critics caution about potential risks if the technology advances without clear safeguards.
The momentum behind tokenized stocks
Despite concerns, tokenized stocks 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 stocks 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 suggested tokenized stocks could soon reach a tipping point in a broader shift toward hybrid finance, where blockchain technology coexists with traditional markets.
Binance estimates the tokenized equity market could eventually exceed $1.3 trillion if just 1% of global shares migrate to blockchain networks.
As regulators weigh next steps, market participants will watch the SEC’s forthcoming proposal closely.
The outcome could determine whether tokenized stocks remain a niche product or become a transformative force in global equity markets.