TLDR

The SEC is developing a plan to allow blockchain-based versions of publicly traded stocks to trade on approved cryptocurrency exchanges
Major platforms including Nasdaq, Coinbase, Robinhood, and Kraken are seeking approval or already testing tokenized stock products
Tokenized stocks could eliminate multi-day settlement periods and reduce reliance on traditional clearinghouses
Over $31 billion in assets have been tokenized, but equities currently represent only 2% of that total
Citadel Securities has raised concerns about ensuring tokenization provides real market benefits rather than regulatory loopholes

The US Securities and Exchange Commission is reviewing a proposal that would permit blockchain-registered versions of stocks to trade on regulated cryptocurrency exchanges. The plan remains in early development stages but is gaining attention across multiple divisions within the agency.

NYSE, *the world’s largest stock exchange*, just met w/ SEC Crypto Task Force…

The topic?

You guessed it.

Tokenized equities.

I know you’re paying attention now. pic.twitter.com/kvc7I5mjWM

— Nate Geraci (@NateGeraci) September 30, 2025

The framework would allow investors to buy and sell stock tokens on approved crypto platforms. These tokens would represent legal ownership in publicly traded companies. Transfers would be recorded on blockchain networks instead of traditional clearing systems.

SEC Chair Paul Atkins recently called tokenization an innovation the agency should advance. He stated regulators should focus on how to promote innovation in the marketplace. Atkins noted that tokenized assets could improve market access and reduce costs.

Several major financial platforms are already moving into this space. Nasdaq has requested SEC approval for a rule change that would allow it to list tokenized securities on its exchange. Coinbase is reportedly preparing a licensing application to operate as a broker for digital equities.

Robinhood and Kraken have begun offering tokenized stock products. These platforms have conducted early experiments with synthetic stock tokens in overseas markets. The moves reflect growing institutional interest in blockchain-based financial products.

Industry Response and Concerns

Traditional finance companies have expressed mixed reactions to the proposal. Citadel Securities submitted a letter to the SEC’s Crypto Task Force in July urging caution. The firm asked regulators to ensure tokenization delivers genuine market benefits rather than exploiting regulatory gaps.

The letter stated that tokenized securities must achieve success through real innovation and efficiency. Citadel warned against what it called regulatory arbitrage. Despite these concerns, the momentum behind tokenization continues to build.

BlackRock formed a tokenization division earlier this year. This move signaled broader confidence in blockchain-enabled finance among major institutional players. Several pilot projects already exist in Europe and Asia where regulated exchanges conduct real-time settlement of digital securities.

Market Growth and Potential

More than $31 billion in assets have been tokenized across public and permissioned blockchains. However, tokenized equities currently account for only about 2% of that total. The value of tokenized stocks has nearly doubled over the past 100 days.

Industry data shows accelerating adoption in this sector. A recent Binance Research report compared the rise of tokenized stocks to the early days of decentralized finance in 2020 and 2021. The report suggests tokenized equities may be approaching a major turning point.

Binance Research estimates the market for tokenized stocks could exceed $1.3 trillion if just 1% of global equities move onto blockchain networks. This projection assumes adoption rates similar to other tokenized asset classes. The estimate reflects the potential scale of the market opportunity.

Supporters of the proposal argue that blockchain-based equities could eliminate multi-day settlement periods. Current stock trades typically take two business days to settle. Blockchain technology could enable real-time settlement and reduce reliance on third-party intermediaries such as clearinghouses.

Former SEC officials have publicly acknowledged that tokenization could increase market transparency when executed under strict oversight. The technology could also improve global liquidity. These potential benefits are driving interest from both crypto-native companies and traditional financial institutions.

Sources cited by The Information claim the initiative is gaining traction within the SEC’s market structure and innovation units. The proposal remains under internal discussion. No timeline has been announced for when the agency might issue formal guidance or rule changes related to tokenized equities.

The post SEC Explores Framework for Blockchain-Based Stock Trading on Crypto Exchanges appeared first on CoinCentral.

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Filed under: News - @ October 1, 2025 7:26 am