US SEC Lowers Barriers to Tokenized Stock Trading, Paving Way for 24-Hour Trading

The U.S. Securities and Exchange Commission (SEC) has significantly eased regulations to pave the way for the full-fledged trading of "tokenized stocks," which allow existing shares to be bought and sold in the form of digital tokens on a blockchain.

This move is expected to serve as a catalyst for expanding the tokenized stock market in the United States and accelerating 24-hour trading of equities.

According to The Wall Street Journal (WSJ), the SEC announced on September 17 (local time) that it will exempt qualifying tokenized stock trading platforms from certain regulations applicable to traditional securities exchanges for a period of five years.

The measure takes effect immediately.

Tokenized stocks are traditional shares implemented as digital tokens so they can be traded on a blockchain.

Under this measure, tokenized stocks traded must carry the same shareholder rights as conventional shares, such as dividends and voting rights.

For example, if Apple stock is tokenized, it must be a token that holds the rights granted to Apple shares—including dividends and voting rights—rather than simply tracking the movement of Apple's stock price.

On the other hand, synthetic stock tokens that track only price movements without actual shareholder rights are excluded from this measure.

Previously, new blockchain-based platforms mediating tokenized stock trades could be classified as exchanges under the Securities Exchange Act and be subject to heavy regulations. However, under the new measure, platforms that meet SEC conditions such as trading transparency and record-keeping can now enter the market by receiving exemptions from certain regulations.

This decision comes just two days after the Senate stalled on the "Clarity Act," which aimed to clarify the regulatory framework for the U.S. cryptocurrency market, leading observers to interpret that the SEC is utilizing its existing authority to streamline regulations on tokenized securities.

SEC Chairman Paul Atkins said in a statement, "Through the 'innovation exemption' authorized by law, we have made significant progress in leading the U.S. capital markets into the digital age by facilitating on-chain trading of certain tokenized stocks."

The expansion of tokenized stock trading is drawing market attention because it could enable round-the-clock, 24-hour trading unconstrained by traditional stock market hours, as well as faster settlements.

Conversely, concerns have also been raised that if tokenized stock trading takes place in a separate market from traditional stock exchanges, liquidity could become fragmented and investor protection weakened.

In consideration of these concerns, the SEC attached conditions to the regulatory exemption, including trading volume caps, trading transparency, and record-keeping requirements.

Companies can also refuse to have their shares tokenized.

If a third party wishes to tokenize a specific company's shares, it must notify the company 30 days in advance, and trading cannot proceed if the company objects.
 
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※ Please note: This article was translated by AI and may contain errors.