SEC May Allow Tokenized Stocks to Trade on Crypto Exchanges, Binance Among Platforms Mentioned

• SEC exploring regulated trading of blockchain-based stock tokens on crypto exchanges

• Tokenized equities offer fractional ownership, faster settlement and lower custody costs

• More than $31 billion in total assets are tokenized today; tokenized equities are ~2% but doubled in value in 100 days

Stock tokenization: SEC explores regulated trading of blockchain-based stocks on exchanges — learn what it means for investors and markets. Read more.

The SEC is exploring a plan to let blockchain-based versions of stocks trade on crypto exchanges, signaling growing support for tokenization.

The US Securities and Exchange Commission (SEC) is developing a framework to allow blockchain-registered stock tokens to be traded on approved cryptocurrency exchanges. The proposal, currently in formative stages, aims to bring tokenized equities under an established regulatory regime while expanding market access.

Reported by The Information and confirmed by multiple industry sources, the plan would allow investors to buy and sell digital representations of publicly traded shares on licensed crypto platforms. Regulators emphasize investor protection and compliance as prerequisites for any rollout.

Why is the SEC considering this? SEC Chair Paul Atkins has called tokenization an “innovation” the agency should advance. Tokenized securities can reduce settlement times, improve fractional ownership, and lower custody costs for retail and institutional investors.

Source: Nate Geraci

What is stock tokenization?

Stock tokenization is the process of issuing blockchain-based tokens that represent ownership in publicly traded companies. These tokens mirror traditional shares in economic terms while enabling blockchain-native features like fractionalization and programmable settlement.

How would tokenized stocks trade on crypto exchanges?

Approved crypto exchanges would list officially registered stock tokens that comply with securities laws. Trading could occur on blockchain rails with smart-contract settlement. Exchanges, broker-dealers and custodians would need to implement compliance, custody, and reporting controls.

Market participants such as Robinhood and Kraken have already experimented with tokenized stock products. Nasdaq has applied for rule changes to permit listing of tokenized securities, and Coinbase is reported to be seeking permission to offer tokenized equities under regulatory oversight.

Source: Joe Weisenthal

How big is the tokenization market today?

Industry data shows over $31 billion in tokenized assets overall. Tokenized equities are about 2% of that total but have nearly doubled in value in the past 100 days, indicating rapid growth and investor interest.

Binance Research estimated that if just 1% of global equities moved on-chain, the tokenized stocks market could exceed $1.3 trillion, highlighting the potential scale if regulatory and market infrastructure evolve.

The market for tokenized equities is gaining momentum. Source: RWA.xyz

What are the main concerns from traditional finance?

Traditional firms caution regulators to ensure tokenization delivers genuine market benefits rather than exploiting regulatory gaps. Citadel Securities has urged the SEC to require that tokenized securities provide real innovation, efficiency, and transparency.

Frequently Asked Questions

Can tokenized stocks replace traditional shares?

Tokenized stocks are unlikely to fully replace traditional shares in the short term. They complement existing markets by enabling fractional ownership and faster settlement, but widespread adoption depends on regulatory clarity and robust custody and clearing infrastructure.

Will tokenized stocks increase retail access?

Yes. Tokenized stocks can lower ownership minimums and enable fractional positions, expanding retail accessibility. Regulatory safeguards will determine how broadly these benefits reach everyday investors.

Key Takeaways

• Regulatory momentum: The SEC is actively exploring a framework for tokenized stocks on regulated exchanges.
• Market scale: Tokenized assets exceed $31 billion; equities are a small but fast-growing slice.
• Next steps for investors: Watch regulatory developments, verify custody solutions, and evaluate platform compliance.

Conclusion

The SEC’s exploration of stock tokenization represents a pivotal moment for tokenized equities and hybrid finance. If implemented with robust compliance and market safeguards, tokenized stocks could expand access, speed settlement and lower costs. Stakeholders should monitor rulemaking and readiness across exchanges, custodians and broker-dealers.

Published: 2025-09-30 — Author: COINOTAG