The U.S. Securities and Exchange Commission has opened a regulated pathway for tokenized stocks. Under an Innovation Exemption announced this week, a qualifying Tokenized Securities Venue (TSV) — a trading platform for tokenized shares — is exempted from the definition of an “exchange” under Section 3(a)(1) of the Exchange Act, provided it satisfies conditions the agency spells out in the relief. A second limb exempts so-called Covered Firms that commit their own capital to automated market maker liquidity pools from the “dealer” definition in Section 3(a)(5), allowing them to quote prices and supply liquidity the way a market maker on a decentralized exchange would. Both exemptions run for exactly five years, from September 17, 2026, to September 17, 2031. The device matters because the exchange and dealer classifications are what bring trading platforms and market-making firms under the Exchange Act's registration and oversight regimes — the exemptions substitute the agency's spelled-out conditions for those statuses, and only for a defined five-year window.

Strict Conditions on Tokenized Venues

The requirements are demanding. Smart contracts powering a venue must be publicly disclosed and auditable, deployed on a permissionless public blockchain, and trading itself must be restricted to identity-verified, permissioned participants — a structure the SEC says supports sanctions screening and anti-money-laundering controls.

The substantive core is a “same rights and privileges” test: a tokenized share must carry the same equity interest, the same dividend and voting rights, and the same residual claim in a liquidation as its traditionally issued counterpart. Notably, the relief reaches only the secondary market, not new issuance.

One clause is set to shape the tokenization race directly. Where a third party tokenizes a listed stock on its own initiative, the venue must give the issuer at least 30 days' written notice, and a written objection from the issuer bars that token from trading. In effect, the clause makes issuer non-objection a gating condition for third-party tokenization — listed companies hold an effective veto over which of their shares reach on-chain markets.

Liquidity providers face their own guardrails: activity is limited to tokenized U.S. listed stocks, trading must be strictly on an own-account basis, and custody of customer assets is prohibited, alongside record-keeping duties and a notification to the SEC. Trade-size limits, and a requirement to halt tokenized trading in lockstep with the underlying market, are designed to stop the tokenized venue from drifting away from the stocks it mirrors — the shares in question could range from a mega-cap such as Costco (COST) to a small-cap.

CFTC Endorses Tokenized Funds and On-Chain Ledgers

While the SEC was building its tokenized-venue framework, the Commodity Futures Trading Commission moved on a parallel track. On September 24, an official CFTC announcement confirmed updated guidance under which registered crypto businesses may invest customer funds in tokenized form, so long as the tokenized asset grants holders legal and economic rights identical or functionally equivalent to those of a traditional asset holder. The same update states the agency will not object to firms using blockchain technology as their recordkeeping medium — in effect placing on-chain records on par with conventional books during regulatory examinations. The measures expand on guidance first issued in March.

CFTC Chair Michael Selig framed the revision as part of delivering regulatory clarity to the industry, though the timing is difficult to separate from legislation. On September 23, the Senate fell 52-46 short of advancing the CLARITY Act, leaving the SEC–CFTC division of labor unconfirmed in law. The CFTC has since submitted a crypto market-regulation plan to the White House for review, and in August it proposed rules covering crypto asset investment contracts. SEC Chair Paul Atkins, speaking before the vote, said the agencies are prepared and able to write crypto rules without congressional action.

The two moves are complementary: the SEC's relief governs where tokenized shares can trade, while the CFTC's update governs how customer funds at registered crypto businesses can be held and in tokenized form. In practical terms, firms can now manage customer funds directly in tokenized form — cutting conversion costs and settlement friction — while exchanges no longer need to maintain parallel ledgers for examinations. Open questions remain, including whether the guidance extends to stablecoins and tokenized deposits, and how it interfaces with tokenization infrastructure such as Arc blockchain, Circle's stablecoin-native layer-1.

A Yen-Denominated Parallel in Japan

The tokenization story has a yen-denominated counterpart. The Japan Blockchain Foundation announced on September 24 that its Stablecoin Proof-of-Experiment Partners program is underway, with 26 companies and organizations signed on, including Toshiba, SCSK, QUICK, Asahi Broadcasting Group Holdings, Hachijuni Bank, and the city of Tagawa, Fukuoka — a roster that spans electronics, IT services, financial information, broadcasting, regional banking, and local government rather than a crypto-native cohort.

The program centers on EJPY, a trust-type yen stablecoin that the foundation plans to issue on Japan Open Chain, an Ethereum-compatible public chain operated entirely from Japan, with Ethereum issuance also planned and the JOC launch targeted within fiscal 2026. Participants will explore domestic and cross-border payments, inter-company settlement, real-world asset (RWA) and security token settlement, and Web3 and regional-economy use cases, supported by study sessions, test coins, and wallets on JOC. Participation is free, runs roughly from September 2026 to February 2027, and does not commit any participant to issuing or handling the token commercially.

Agency Rules Fill the Legislative Void

Read together, the moves trace a single arc: U.S. crypto policy has pivoted from legislative to agency-led market design. The relief binds two defined sets of entities — TSV operators and Covered Firm liquidity providers — for a fixed window ending September 17, 2031, and is expressly temporary: a sandbox ahead of a permanent regime.

For Bitcoin (BTC) and the broader tokenization trade, the operative question is whether the SEC's venue conditions and the CFTC's custodial guidance converge into standing rules — and whether Congress revisits market structure once the five-year test period generates real data.