The Securities and Exchange Commission on Thursday approved a temporary rule, called the Innovation Exemption, that allows limited trading of tokenized US stocks on a new category of specialized platforms called Tokenized Securities Venues, without those venues having to register as exchanges under the Securities Exchange Act of 1934. The move was reported by UPI and CoinDesk.
The exemption runs for five years, functioning as a live test of broader stock-market tokenization before any permanent rulemaking. Under its terms, tokenized shares must carry the same rights as the underlying traditional stock, including dividend payments and voting rights, and individual companies retain the right to decide whether their own shares can be tokenized at all. SEC Chair Paul Atkins said the exemption is "designed to resolve challenges that have prevented responsible innovation from taking root in the United States while providing investor protections and market integrity standards," adding that the agency favors "technology-neutral regulation, which can effectively adapt to onchain environments."
Robinhood Rallies as Crypto Platforms Eye a Domestic Market
Tokenized stock trading already exists at platforms including Robinhood, Coinbase, Gemini and Kraken, but until now it has been offered only in markets outside the United States. The new framework opens a path for those same crypto-native platforms to compete more directly with traditional brokers for US customers, and to move toward the 24-hour trading cycle that tokenization makes possible, unlike the exchange floor's standard trading hours. Robinhood shares rose roughly 6% on the news, one of the sharpest single-day reactions among companies tied to the announcement.
The exemption lands two days after the US Senate rejected the Clarity Act, a broader bill that had sought to establish comprehensive federal rules for cryptocurrency and other digital assets. With that legislative path stalled, the SEC's narrower, agency-level exemption becomes the primary near-term vehicle for bringing tokenized equities into the regulated US market.
What Happens Next
Because the exemption is structured as a five-year trial rather than a permanent rule, the SEC will be collecting data on how Tokenized Securities Venues perform before deciding whether to propose lasting regulations. Companies whose shares could be tokenized under the program have not yet said in large numbers whether they will opt in, and market participants are watching for the first platforms to formally register as Tokenized Securities Venues under the new framework.
