'Major Breakthrough': Saylor Reacts to SEC's Big Crypto Move

The U.S. Securities and Exchange Commission has taken one of its biggest steps yet toward bringing Wall Street stocks onto public blockchains.

It has unveiled a temporary regulatory framework that will allow certain tokenized U.S. equities to trade using infrastructure borrowed directly from decentralized finance.

Former Strategy CEO Michael Saylor has described it as a "major breakthrough."

Why it is a big deal

Tokenized stocks themselves are not entirely new. Platforms outside the United States have already experimented with blockchain-based representations of publicly traded companies.

The SEC is opening a path for actual secondary-market trading to take place using mechanisms closely associated with crypto and decentralized finance.

A TSV can provide automated market maker liquidity pools in which approved participants buy and sell tokenized shares. AMMs rely on smart contracts and pools of assets rather than the traditional order-book model used by major stock exchanges.

Even more notably, the SEC requires the smart contracts behind these venues to be public and auditable and to operate on a public, permissionless distributed ledger.

The SEC is allowing pieces of the public blockchain infrastructure developed by the cryptocurrency industry to become part of an experimental market structure for U.S.-listed stocks.