Key takeaways
- The SEC, under the leadership of Paul Atkins, plans to issue a token equity innovation exemption as early as May 18, 2026.
- The framework could open up US stock markets to platforms like Coinbase without full broker registration.
- The exemption follows token trading approvals from Nasdaq and NYSE in March and April 2026, signaling an acceleration in on-chain adoption.
SEC Innovation Exemption Signals Major Change for On-Chain US Stock Trading in 2026
The exemption creates a new framework for trading tokens that represent ownership of or exposure to publicly traded companies. People familiar with the matter told Bloomberg the move was imminent, placing it among the most significant regulatory actions taken under SEC Chairman Paul Atkins.
The Trump administration has continued its efforts to integrate blockchain technology in traditional securities markets since early 2025. The SEC approved Nasdaq rules for tokenized stocks in March 2026, followed by a similar approval for the New York Stock Exchange (NYSE) in April 2026.
Both exchanges now allow tokenized versions of certain stocks and exchange-traded funds (ETFs) to trade alongside traditional stocks using the Depository Trust Company’s tokenization pilot. The innovation exemption takes a different approach. While the Nasdaq and NYSE approvals kept tokenized trading within the existing market structure, the new exemption targets broader on-chain trading.
It is designed to allow crypto-native platforms to offer tokenized stocks under lighter regulatory requirements for an experimental period. The SEC has been discussing the exemption since mid-2025 as part of what Atkins called “Project Cryptocurrency.” Industry participants submitted comments throughout this process, including pushback from traditional exchanges that warned of diluted investor protections and unfair competition.
Under the expected framework, platforms might be able to offer tokenized stocks without obtaining full broker or exchange registrations in some cases. The exemption should include safeguards such as exposure limits, disclosure requirements and restrictions related to its temporary or conditional nature.
In January 2026, the SEC issued guidance clarifying that tokenizing a security does not change its regulatory classification. Federal securities laws still apply based on economic substance, meaning that tokenized stocks remain subject to the same rules as their underlying instruments.
The practical benefits of trading tokenized stocks include faster settlement times, fractional ownership, lower transaction costs, and the ability to trade 24 hours a day. These features have attracted interest from decentralized finance platforms and investors seeking broader access to U.S. stock markets.
Entities such as Coinbase could benefit if the exemption allows crypto platforms to offer compliant tokenized stock transactions without full registration. Decentralized finance (DeFi) protocols seeking to list tokenized stocks on-chain would also fall within the apparent scope of the exemption.
Traditional financial institutions raised objections throughout the rulemaking process. Banks and exchanges have argued that the sandbox approach creates competitive imbalances and weakens safeguards around custody, anti-money laundering compliance and market fragmentation.
The SEC has not yet published the exemption on its website. Full details, including eligible participants, scope, and specific requirements, will likely be available upon official posting on sec.gov. The move is part of the current administration’s broader efforts to modernize market structure through joint SEC and CFTC coordination, token taxonomy work, and on-chain settlement modernization.
Atkins has positioned the agency as a facilitator of financial innovation, and the token stock exemption represents the clearest step yet toward allowing blockchain-based regulated securities trading at scale in the United States.
