US SEC poised to allow stock token trading in potential market shakeup

• Coinbase, Robinhood, and Kraken plan to launch tokenized stock trading in the U.S. once the exemption is issued, potentially allowing crypto firms to perform multiple market functions (execution, clearing) without full SEC broker-dealer compliance
• The global tokenized stock market has surged from just a few million dollars in late 2024 to over $6.4 billion currently, according to CoinMarketCap data
• Traditional Wall Street firms including Citadel Securities and SIFMA oppose the exemption, arguing it should require formal rulemaking rather than ad hoc approval and warning it could siphon liquidity from public markets

Summary: SEC Poised to Allow Stock Token Trading in Potential Market Shakeup

The U.S. Securities and Exchange Commission is preparing to authorize crypto companies to offer blockchain-based stocks through an "innovation exemption" expected within weeks, according to analysts and lawyers. SEC Chairman Paul Atkins, appointed by President Trump, plans to unveil guidelines allowing firms to experiment with tokenized stock trading without full compliance with traditional SEC disclosure and investor-protection rules.

Key Market Data:

• Tokenized stocks' global market capitalization has surged to over $6.4 billion, according to CoinMarketCap
• The market was worth only a few million dollars at the end of 2024, representing explosive growth

Companies Involved:

Major crypto exchanges including Coinbase, Robinhood, and Kraken are poised to launch tokenized stock offerings in the U.S. once regulations permit. Robinhood and Kraken already offer such products overseas, while Coinbase announced plans for international launches this week. Traditional brokerages like Morgan Stanley's E*Trade and Charles Schwab could face new competition from crypto platforms.

Market Implications:

The exemption could enable crypto firms to perform multiple stock market functions—including trade execution and clearing—simultaneously, potentially disrupting traditional market structure. However, Wall Street firms including Citadel Securities and the Securities Industry and Financial Markets Association oppose the move, arguing such significant changes should undergo formal rulemaking rather than ad hoc exemptions. Critics warn tokenization could fragment market liquidity and create new investor risks.

This policy shift represents a broader crypto-friendly pivot under the Trump administration, reversing the Biden-era crackdown on digital assets. The exemption is expected to be temporary and limited initially, though it could pave the way for major long-term structural changes in equity markets.