SEC plans tokenized stock trading on crypto platforms

The U.S. Securities and Exchange Commission is developing a plan to permit tokenized versions of publicly traded stocks to be bought and sold on cryptocurrency trading platforms, agency staff and industry participants said. The initiative, still in early stages, would create blockchain-based tokens that represent shares in companies such as Tesla and Nvidia and has prompted talks between SEC staff and major exchanges and crypto firms about potential trading and oversight frameworks.

Agency discussions have involved traditional market operators including the New York Stock Exchange and Intercontinental Exchange as well as crypto platforms and brokerages that have already launched or sought to offer tokenized stock products. Some firms are pressing for rapid approval to enable trading of tokens on crypto exchanges, while several established financial firms have warned regulators to ensure any new framework produces genuine market benefits and does not create avenues for regulatory arbitrage.

Proponents argue tokenization could bring several practical changes to equity trading. By recording ownership on distributed ledgers, tokenized shares could enable near-instant settlement,...