SEC introduces five-year innovation exemption allowing onchain trading of tokenized stocks to modernize U.S. capital markets.
Regulation & Gov ·
The SEC has introduced a five-year innovation exemption permitting tokenized U.S. stocks to trade on public blockchains, a move aimed at modernizing U.S. capital markets regulation https://www.theblock.co/news/regulation/2026-09-17-sec-releases-innovation-exemption-415324. The exemption grants limited onchain trading without requiring exchange registration, though it excludes synthetic securities and respects company opt-outs.
The action represents a structured regulatory response to stalled legislative efforts, filling a gap where congressional action on measures like the Clarity Act had slowed https://decrypt.co/378492/sec-innovation-exemption-tokenized-stocks-clarity-act. Market participants including Robinhood's leadership have signaled openness to the tokenization era, and broader industry figures have argued that onchain settlement of securities could reduce costs, enable continuous trading, and improve transparency despite various regulatory tradeoffs.
The exemption's five-year term leaves open whether the framework will become permanent and how widely blockchain-based securities infrastructure will be adopted during the trial period. The precise mechanics of company participation and any enforcement mechanisms remain to be fully demonstrated in practice.