The SEC is about to make a move that could bring the stock market and crypto closer together. It is doing it on its own, without waiting for Congress.
The agency has scheduled an open meeting on Friday to establish a new framework for how certain crypto-related investment contracts can be sold. It also plans to reveal an exemption that could allow 24/7 trading of tokenized securities, which are basically real stocks that live on a blockchain.
The agency could publish details as soon as Friday, according to unnamed sources familiar with the plans. SEC staff are still polishing the proposal, so it may change before release.
What the SEC Has Planned
A tokenized stock is a company's share turned into a digital token that trades on a blockchain, the same kind of technology that powers Bitcoin. Because blockchain networks never close, investors could buy and sell those tokens at any hour, no waiting for the opening bell.
That kind of flexibility matters if news breaks overnight or on weekends. It also brings the stock market closer to the crypto world, where trading never stops.
The SEC originally planned to release the exemption in May. It pushed the date back after hearing from exchanges, public companies, and other stakeholders. This delay highlights the delicate balance regulators face between fostering innovation and protecting investors. The proposed exemption, if finalized, would mark a significant step toward integrating traditional finance with digital assets, a shift accelerated by growing demand for round-the-clock trading.
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One big worry was third-party tokens, which are created by someone other than the company whose stock is being tokenized. The revised proposal may give companies the option to reject a third-party listing of their stock.
Another concern was security. Regulators worried that overseas bad actors could slip in through blockchain loopholes, so the new rules likely include stricter controls and anti-money-laundering requirements, including a demand that trading platforms be based in the US.
