The US Securities and Exchange Commission has reportedly delayed its plan to allow trading in tokenized shares after exchange officials raised concerns about how the plan would be implemented.
Bloomberg reported on Friday, citing sources familiar with the matter, that the SEC’s “innovation exemption” for crypto-based stocks is expected to be announced within the week, with SEC staff already reviewing a draft proposal for trading stocks in tokenized tokens.
The SEC reportedly received input from hundreds of market participants on how best to implement the rules, but has not made a decision to change its proposal.
According to the SEC proposal, platforms offering tokenized shares should guarantee investors the same rights as traditional shareholders, including dividends and voting rights.
Market participants reportedly raised concerns with the SEC about the potential proliferation of unauthorized third parties issuing tokens without the consent of public companies and how ownership would be verified on semi-pseudonymous blockchains.
The SEC has been more open to crypto-powered financial products under the Trump administration, coinciding with Wall Street’s surge in interest in tokenization and stablecoins.
Data s RWA.xyz shows that $34 billion in real-world assets have been tokenized, including $1.55 billion in tokenized stocks, but adoption has lagged behind expectations from Citibank and McKinsey, which predicted in 2022 and 2024 that tokenization would become a multi-trillion dollar market by 2030.
The crypto industry supports the decision to postpone
Crypto industry executives supported the SEC’s decision to delay the exemption. Carlos Domingo, CEO of crypto tokenization platform Securitize, he said in a post to X on Friday that it is important to ensure that “the exemption applies to the right instruments.”
“Better to delay than to do it wrong and unleash all kinds of problems.”
Related: Kraken parent Payward sees revenue rise as tokenization spreads
Tom Farley, CEO of crypto exchange Bullish, announced to X that the SEC “understands that public companies are the only entity that can issue tokens that are shares of stock! Great job delay and correction.”
Source: Tom Farley
The delay came after SEC Commissioner Hester Peirce said Thursday that she expected the exemption to be “limited in scope” and would support only “digital representations” of equity securities, similar to what investors can currently buy in the secondary market.
In January, the SEC differentiated between types of tokenized securities, classifying them into “custodial” and “synthetic” forms.
Custodial tokenized securities are issuer-sponsored tokenized shares held by regulated intermediaries and have full shareholder rights, while synthetic tokenized securities provide price exposure without actual ownership of the underlying shares.
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