SEC to unveil tokenized-stocks exemption as market tops $1.4B

The Securities and Exchange Commission is preparing an innovation exemption that would allow third-party tokenized versions of public company shares to trade on decentralized platforms without backing or consent from the companies whose shares they track.

Under the draft framework, tokens could mirror share prices on public markets while not granting traditional shareholder rights such as voting or dividend claims.

Tokens would be issued and traded by third parties and listed on decentralized trading platforms rather than on regulated exchanges. Officials may release the framework as early as this week.

The draft separates a digital token’s market representation from the legal ownership of underlying equity, meaning on-chain holders could lack enforceable rights under corporate law.

Market infrastructure providers and exchanges are preparing for tokenized securities. The Depository Trust & Clearing Corporation plans limited production trades through its tokenization service starting July 2026, with a wider rollout in October 2026. Earlier this year, major exchanges announced plans for equity token designs and for platforms to support on-chain trading and settlement.

Market activity has grown in recent weeks. Data tracking distributed tokenized stocks shows about $1.4 billion in distributed value across 2,246 tokenized assets, a roughly 30% increase over the past 30 days. Monthly transfer volume reached about $3.24 billion, and the number of holder wallets rose to near 265,000, up about 25%.

Market concentration is high: Ondo holds about $883 million in tokenized equity, roughly 60% of the total, while xStocks holds about $404.5 million, or about 27%.

The exemption would establish a regulatory path for tokens that track public equities and would set limits on what those tokens represent under securities rules.