US SEC Approves Limited Trading of Tokenized Stocks

The U.S. Securities and Exchange Commission (SEC) has approved a 'temporary conditional exemption' (innovation exemption) that permits limited trading of tokenized U.S. stocks in on-chain environments, according to Unfolded. This allows regulated financial institutions and crypto platforms to test and operate on-chain stock trading in a sandbox-like manner before formal regulations are established. However, only 'real asset tokenized stocks' with the same rights as traditional shares—such as dividend and voting rights—are eligible for the innovation exemption; synthetic assets designed solely for price tracking are strictly excluded. If a third party tokenizes a stock, the securities token exchange (TSX) must notify the issuing company (the business), and if the company exercises its right to object within 30 days, trading is prohibited. Each TSX faces limits on the number of stocks it can handle and daily trading volume ratios, with the exemption taking effect immediately for up to five years.