SEC Greenlights Tokenized Stocks After Clarity Act Fails in Senate

The SEC isn’t waiting for clarity with a capital C to give tokenized stocks the go-ahead. 

On Thursday, Wall Street’s watchdog issued a five-year order allowing trading venues to offer digital representations of company shares. The move ushers in a 24/7 type of trading that proponents say reduces counterparty risk through faster settlement. It also comes just days after the Senate blocked the Clarity Act, which would have provided a regulatory framework for cryptocurrency. The new rule is “designed to resolve challenges that have prevented responsible innovation from taking root in the United States while providing investor protections and market integrity standards,” SEC Chairman Paul Atkins said. 

The “Innovation Exemption,” which has been in the works for more than a year, shows the SEC is willing to set rules that could push crypto-related offerings forward without lawmakers’ buy-in at a time when investors are hungry for digital assets and trading firms are eager to meet their demand. That’s good news for Robinhood and Coinbase, which both offer tokenized stocks overseas and whose own stocks climbed 5% and 6% respectively on Thursday. 

AMC v. Robinhood 

The SEC move also answers a big question that has had Robinhood CEO Vlad Tenev feuding with theater-chain AMC’s CEO Adam Aron in recent weeks: Do companies get a say over the tokenization of their stocks?