Bloomberg reports the SEC has paused plans to roll out a broad “innovation exemption” that would have cleared the way for U.S. crypto firms to trade tokenized stocks and other tokenized assets — a move that slows a high-profile push to bring blockchain into mainstream securities markets.
According to people familiar with the matter who spoke on condition of anonymity, SEC staff had been preparing to publish the exemption as soon as this week. That timeline shifted after the agency absorbed pushback from stock-exchange officials and other market participants in recent discussions.
The main flashpoint: a proposed allowance for trading third-party tokens — digital representations of company shares issued without the knowledge or approval of the underlying corporations. Former regulators and market experts warn that such tokens could create knotty operational headaches for public companies, from tracking dividend payments to counting shareholder votes as tokenized holdings proliferate across different networks.
The delay affects crypto firms and financial institutions that were lining up tokenized-asset launches under the expected framework. The exemption had been pitched by SEC leadership as a kind of regulatory sandbox for on-chain equities; SEC Chair Paul Atkins had previously signaled the agency would debut the proposal soon.
Not everyone agrees the pause is warranted. SEC Commissioner Hester Peirce pushed back on criticism, arguing the framework is narrowly tailored. Writing on X, Peirce said the exemption would “facilitate trading only of digital representations of the same underlying equity security that an investor could purchase in the secondary market today, not synthetics,” and urged against overstating the proposal’s scope.
For now, the industry will wait as the SEC continues to refine the plan in response to market feedback — a reminder that integrating tokenized securities into existing corporate and regulatory structures remains a complex, politically sensitive task.
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