SEC greenlights tokenized stock trading, blurring the line with crypto markets

The US Securities and Exchange Commission has taken a landmark step toward merging traditional equity markets with blockchain technology. On September 17, the agency granted a set of five‑year, conditional exemptions that allow certain venues and broker‑dealers to trade “tokenized” US stocks—digital representations of shares recorded on a blockchain—under a tailored regulatory framework. The move effectively imports core crypto‑market infrastructure into the roughly $75 trillion US equity market.

Under the exemptions, approved platforms will be able to offer tokenized shares that carry the same economic rights as conventional stock, but can settle on distributed ledgers and potentially trade nearly 24/7 in smaller, fractional units. Supporters say this could lower frictions, expand access for smaller investors and enable more programmable finance. Critics worry about cybersecurity, market manipulation and the operational risks of running parallel settlement systems. The SEC stresses that this is a tightly controlled pilot, but if it proves successful it could influence regulators globally and further erode the boundary between equity investing and the crypto ecosystem.