SEC creates tokenized stock pathway

The SEC issued an Innovation Exemption allowing trading platforms to issue digital representations of publicly traded U.S. stocks, effective immediately.

Two key requirements for token holders

Stock token holders must retain the same rights as traditional shareholders, including voting and dividends. Companies can object to having their securities tokenized.

Move comes after Clarity Act fails

Two days after the Clarity Act failed to advance in the Senate, the SEC is using its existing authority to build crypto regulatory rules without waiting for Congress.

Five-year exemption to test the market

The exemption is temporary and designed to let the market evolve while the SEC monitors activity and gathers data to inform future permanent rules.

“The Commission is not cementing today's technology as the standard for tomorrow.”

Tokenization enables 24/7 trading

Digital stock representations on blockchain could allow continuous trading and faster settlement, plus easier integration with blockchain financial infrastructure.

Robinhood and AMC clash over rights

AMC CEO Adam Aron criticized Robinhood for offering stock tokens without company involvement, arguing it undermines the shareholder relationship.

Companies get 30-day veto window

Trading platforms must notify companies before tokenizing their shares and wait 30 days. Companies can block tokenization during that period.

Robinhood adds voting rights to tokens

Robinhood announced it will let stock-token holders redeem tokens for underlying shares one-to-one and add voting rights to address shareholder concerns.