SEC moves to allow on‑chain trading of stocks with draft tokenized‑stocks rules

The U.S. Securities and Exchange Commission is preparing a framework that would allow trading in tokenized versions of stocks, according to Bloomberg and follow-up reporting from The Block. Bloomberg reported on May 18 that the SEC could release an “innovation exemption” for tokenized stocks as soon as this week, creating a new path for digital versions of publicly traded securities. Reuters separately reported the administration was readying rules for “crypto versions of stocks,” citing Bloomberg. The proposal matters because it moves tokenized equities closer to the regulated market structure used by exchanges and broker-dealers, rather than leaving them as offshore or pilot products. The Block reported that the SEC had already approved several entities to move forward with tokenized-stock initiatives, including the New York Stock Exchange and Nasdaq. (bloomberg.com) ### What is the SEC actually preparing to release? Bloomberg reported that the SEC is expected to publish an innovation exemption for tokenized stocks, and that people familiar with the matter said it could arrive as soon as the week of May 18. The Block described that exemption as a framework for tokenized securities that could allow traditional institutions to experiment with blockchain-based issuance and trading without going through the full registration process otherwise required. (theblock.co) Hester Peirce, an SEC commissioner, said in March that the agency was working on a “narrower” innovation exemption for tokenized securities. The Block reported at the time that the SEC’s Investor Advisory Committee had urged a rule-by-rule approach rather than a blanket exemption, suggesting the agency was trying to build a limited pathway rather than a wholesale rewrite of securities law. (bloomberg.com) ### How is a tokenized stock different from a regular stock trade? Nasdaq’s earlier filing gives the clearest picture of the market structure the SEC has been considering. The Block reported in September 2025 that Nasdaq asked to let tokenized versions of listed stocks and ETFs trade on the same order book as traditional shares, with blockchain-based settlement layered into the existing system. (theblock.co) A March 2026 SEC-approved rule change for Nasdaq went further. The Block reported that eligible participants would be able to settle trades in tokenized form during a pilot operated by the Depository Trust Company, part of DTCC. That means the immediate change under discussion is not a separate crypto casino for equities, but a regulated venue where the security remains a stock while the recordkeeping or settlement rail becomes blockchain-based. (theblock.co) ### Which firms are already in position to use it? Nasdaq has been public about its push. Bloomberg reported in September 2025 that the exchange operator sought SEC approval to amend rules so tokenized stocks could trade on regulated venues like Nasdaq. The Block has also reported that the SEC approved a Nasdaq tokenized-equities trading pilot and that the NYSE was among entities cleared to pursue tokenized-securities initiatives. (theblock.co) The Block also reported last month that firms including Robinhood, Kraken and Coinbase were launching or exploring on-chain equities offerings, while Ondo sought SEC clearance for a tokenized-equities model on Ethereum. Those efforts suggest the likely field will include both incumbent exchanges and crypto-native platforms. ### Where would these trades likely settle? (bloomberg.com) Ethereum has emerged as the chain most often named in tokenized-securities proposals already in public view. The Block reported that Ondo’s model sought clearance on Ethereum, and Nasdaq’s own tokenized-share proposal contemplated integrating blockchain settlement with existing regulated trading infrastructure. (theblock.co) That does not amount to an SEC designation of Ethereum or any specific layer-2 network. But the reporting indicates the agency is building a framework around regulated institutions, approved pilots and limited exemptions, which would favor networks and settlement rails that can support compliance controls, transfer restrictions and institutional custody standards. That is an inference from the structure of the proposals already reported, not a statement the SEC has yet made publicly. (theblock.co) ### What happens next if the exemption appears this week? The next milestone is the SEC’s publication of the innovation exemption itself. Bloomberg reported that timing could be as soon as this week, and The Block said the same in its May 18 follow-up. After that, the practical test will be which approved operators — including Nasdaq and the NYSE, as reported by The Block — move from filings and pilots to live tokenized-stock trading programs. (bloomberg.com) (theblock.co)