The US Securities and Exchange Commission (SEC) has approved a temporary exemption allowing limited trading of tokenized US stocks on certain onchain venues, creating a regulated pathway for blockchain-based versions of exchange-listed American equities.

Under the innovation exemption, approved Thursday, Tokenized Securities Venues (TSVs) can offer permissioned trading tokenized National Market System (NMS) stocks — equities governed by the SEC's Regulation NMS framework, which underpins US exchange-listed securities markets.

The exemption covers trading through automated market makers and liquidity pools, the smart contract-driven mechanisms widely used in decentralized finance that match trades against pooled capital rather than traditional order books. It is subject to requirements including transaction transparency, recordkeeping and technology safeguards, SEC Commissioner Mark Uyeda said.

TSVs must also regularly publish US dollar-denominated transaction data, including prices, trade sizes, timestamps, pool addresses, end-of-day pool sizes and daily volumes.

"The Innovation Exemption is designed to be controlled," Uyeda said in a statement, adding that symbol and volume limits will apply. He said the framework would give the SEC data to assess onchain securities trading and inform future rules. In practice, those conditions give the exemption the shape of a supervised trial: the caps keep its footprint narrow, while the mandatory disclosures hand the agency a running record of how onchain trading behaves.

The SEC is seeking public feedback on the framework, including data, case studies and information from live or test environments.

Months in the making

The approval follows months of development at the agency. In February 2026, SEC Chair Paul Atkins, in a joint statement with Commissioner Hester Peirce, said the regulator was considering a temporary framework that would allow limited trading of tokenized securities through automated market makers while it developed longer-term rules.

Uyeda served as the SEC's acting chair in early 2025 before Atkins was confirmed to lead the agency.

Tokenization in context

Tokenization — issuing blockchain-based representations of traditional assets such as stocks, bonds and funds — has become one of the most closely watched developments at the intersection of traditional finance and crypto. Brokerage Robinhood launched tokenized US stock trading for its European customers in mid-2025, and crypto exchanges such as Kraken followed with similar products for non-US users. US regulators, including the SEC, had previously cautioned that tokenized securities must still comply with federal securities laws. Seen against that backdrop, Thursday's approval marks a notable shift: the regulator that had stressed those compliance obligations is now overseeing a limited version of the trading itself.

The innovation exemption now allows such trading on a limited, permissioned basis under SEC oversight, with the agency set to use the collected data to inform future rulemaking. The near-term item to watch is the comment process: feedback, case studies and results from live or test environments will join TSV data as inputs to the longer-term rules the SEC has said it is developing.