SEC Makes Critical Decision That Will Shake the Cryptocurrency Market: “Five-Year Exemption Granted!” Here Are the Details

The U.S. Securities and Exchange Commission (SEC) has made a significant decision that paves the way for tokenized U.S. stocks to be traded on blockchains.

SEC Grants Temporary Trading Permission for Tokenized Shares!

Accordingly, the SEC provided a temporary and conditional exemption, described as an “innovation exemption,” allowing for limited trading of tokenized US stocks in on-chain environments.

With this decision, the SEC granted a temporary exemption to platforms called Tokenized Securities Platforms (TSVs), allowing the trading of tokenized US stocks under certain conditions.

This exemption will be temporary and will expire five years after its publication. The SEC’s five-year conditional exemption allows certain platforms to conduct on-chain trading of tokenized shares.

Traditional Stock Connection Requirement!

One of the key elements of the regulation is maintaining the link between the tokenized asset and the physical stock. According to Reuters, under the new regulation, tokenized shares traded on TSV must be subject to limitations in terms of both trading volume and the number of shares that can be listed.

Under the new framework, only physically backed tokenized shares with the same rights as traditional shares, including dividends and voting rights, are eligible for the exemption, while synthetic assets designed solely to track prices are strictly excluded. In other words, the legal and economic link between the token and the underlying real share must be preserved.