SEC may unveil plan for tokenized stocks this week!

The pro-crypto Trump administration is about to reshape the US stock market!

The United States Securities and Exchange Commission (SEC) is reportedly set to announce a plan for trading tokenized stocks.

According to Bloomberg, that SEC announcement may happen as soon as this week!

If so, this would be yet another major regulatory development, and a close follow-up to last week's passage of the CLARITY Act that was advanced through the US Senate.

READ MORE (published May 13): CLARITY Act "markup" - What you need to know

What are tokenized stocks?

Think of tokenized stocks as digital copies of real company shares (like Apple or Tesla) that live on a blockchain.

Tokenization of real-world assets (RWA) is one of the biggest trends in crypto of late.

RWA proponents say that 24/7 trading and almost-instant settlement can help markets evolve and become more efficient.

What might the SEC announce?

The SEC's plan, the so-called innovation exemption for tokenized stocks, may have a big twist:

Third parties could create these digital versions without the original company's permission.

This fundamentally shifts control over how a company's shares are represented and traded - away from the company itself.

Also, the exemption would create a new framework for trading tokenized versions of publicly traded company shares on decentralized crypto platforms.

Such a framework is part of a broader effort by the administration to loosen rules for crypto markets.

More significantly ...

This will be a major test whether a huge chunk of the TradFi world can integrate, operate, and live on crypto infrastructure, without traditional safeguards.

Where might these tokenized stocks trade?

These tokenized stocks would trade on decentralized crypto platforms — the same kind of platforms where you might already trade crypto.

For instance, xStocks has been launched on Bybit Spot and Bybit Alpha.

To be clear, TradFi mainstays are certainly moving with the times.

• The New York Stock EXchange (NYSE) is already building a platform using blockchains to allow tokenized stocks and exchange-traded funds (ETFs) to be traded.
• Nasdaq - the 2nd biggest US stock exchange - has also already received SEC approval to allow listed stocks and ETFs to be traded and settled as blockchain-based tokens, initially covering Russell 1000 companies and major ETFs, while working with publicly-listed companies to have more control over their tokenized shares.

Early developments - what's happened so far?

• Since mid-2025, there had been initial industry discussions, with the likes of Coinbase seeking SEC approval to offer tokenized stocks, though the former said such a push began as early as 2021.
• On July 31st, 2025, SEC Chairman Paul Atkins rolled out "Project Crypto" - an initiative that allows market players to offer crypto and securities trading products under a single license.
• Since Sept-Oct 2025, Chairman Atkins has also made public comments about paving the way for tokenized stocks, all the way through early-May 2026.

This week, Bloomberg reported that markets may soon get the formal announcement by the SEC on this eagerly-anticipated plan for tokenized stocks.

What could change for investors?

• 24/7 trading — stock markets currently close on weekends; tokenized stocks could trade around the clock.
• Faster settlement — trades could settle instantly on-chain, versus the current two-day wait.
• Global access — people in countries where buying US stocks is difficult could potentially gain access.

Which blockchains are in the picture?

Several blockchain networks are already being used as infrastructure for tokenized securities:

• Ethereum — JPMorgan launched a tokenized money market fund on Ethereum.
• Avalanche — Used by Broadridge for recording corporate and shareholder actions on tokenized equities.
• Solana — Bullish (BLSH) has tokenized shares on Solana.
• Stellar — Used for regulated tokenized capital markets infrastructure in Europe.
• Canton Network — Serving as core infrastructure for DTCC-linked tokenization of Russell 1000 stocks and major ETFs.

Stablecoins also in focus

Stablecoins such as USDT and USDC are expected to play a key role as the settlement currency for tokenized stock trades.

Demand for stablecoins may potentially rise as tokenized asset creation and redemption scales up.

What are the risks?

The regulatory and legal framework for tokenized assets remains unsettled.

Risks flagged include:

• fragmented liquidity - the same stock spread across multiple platforms means buyers and sellers are thinly distributed, making it harder to trade quickly at a fair price — especially in fast-moving markets
• impaired price discovery - if 3rd parties can issue multiple wrappers of the same asset, investors may struggle to understand just how much the underlying asset/stock is actually worth
• Investors' protection - If any intermediary in the chain between the investor and the underlying asset goes bankrupt, the investor could lose ownership/the asset/capital, even if the stock itself is fine. Traditional safeguards like know-your-customer (KYC) and anti-money laundering (AML) processes, as well as circuit breakers and market surveillance that help prevent erratic activities and anomalies, may simply not exist on these new platforms.

Broadly, critics say that the tokenization of shares could introduce uncertainties into financial markets and systems that have already stood the test of time.

Tokenized Stocks: How big could this get?

The tokenized asset market currently stands at $31.4 billion, already up 46% from the start of 2026.

Market forecasts suggest tokenized real-world assets could grow to approximately $16 trillion by 2030, according to Clear Street Equity Research, driven by increasing regulatory clarity and institutional activity.

READ MORE:

What are tokenized stocks? And where to buy them?

What are real-world assets (RWAs) in crypto?

How does asset tokenization work?

DISCLAIMER:

This article is provided for general information and reflects the author's views only. It does not constitute investment advice, nor an offer or solicitation to buy or sell any financial instruments or digital assets. Your ability to access or use any products or services mentioned may be subject to the laws and regulatory requirements of your jurisdiction.