The U.S. Securities and Exchange Commission has delayed plans to introduce a new exemption that would define how it regulates tokenized assets, after staff raised concerns about tokens created by third parties without company consent, according to people familiar with the matter.
The proposed “innovation exemption” was expected to clarify how blockchain-based versions of regulated securities could be issued and traded under federal law and had been targeted for release by the end of last year. No formal revisions have been made to the draft so far, Bloomberg reported, but publication has been pushed back while internal and industry discussions continue.
Key sticking point: third-party token issuers
People briefed on the process said one unresolved issue is tokens that claim to represent shares of publicly traded companies even though those companies are not involved.
Regulators are still examining how such tokens would preserve core shareholder rights, including voting and dividends, when ownership is recorded and transferred on decentralized networks rather than through traditional corporate records.
Officials say the central regulatory concern is maintaining a clear and enforceable link between a shareholder and the company they own. That relationship becomes more complex when unaffiliated entities issue tokens that purport to stand in for existing shares.
What the innovation exemption was meant to do
SEC staff had drafted and internally reviewed the innovation exemption as a kind of limited regulatory sandbox for tokenized equities, according to the sources.
In recent weeks, staff held meetings with executives from stock exchanges and other market participants to gather feedback on the framework before releasing it to the public.
The proposal is understood to focus on digital representations of existing securities, not on synthetic products that only track a stock’s price.
Existing tokenization infrastructure and current pilots
Companies building tokenization systems, including Securitize, Ondo, and Superstate, have already registered as transfer agents with the SEC. Their platforms are designed to maintain official shareholder records and synchronize blockchain transactions with traditional securities settlement systems.
Separately, the SEC has authorized entities such as the Depository Trust & Clearing Corporation to tokenize certain liquid assets on specified blockchains under a three-year pilot.
In parallel, the New York Stock Exchange is developing a platform for 24-hour trading of tokenized equities with regulatory oversight, giving market participants a preview of how tokenized markets could function even without the new exemption.
Regulatory stance: tokenized stocks are still securities
Commissioner Hester Peirce has repeatedly stressed that tokenized stocks remain securities under existing law and must comply with standard regulatory obligations.
On social media, Peirce said any exemption should stay narrow and apply only to direct digital representations of existing equities, not to synthetic crypto instruments that merely mimic their performance.
The commission’s broader position, outlined in a staff statement on January 28, 2026, is that technology does not change the legal status of a financial instrument. Tokenized stocks are fully subject to current federal securities laws, including registration requirements and protection rules, whether ownership is recorded on a corporate ledger or a blockchain.
Expanding market despite regulatory caution
While the rulemaking process slows, the market for tokenized real-world assets has continued to expand. The total value of such assets topped $33 billion in early 2026, up more than 1,600% over two years.
Tokenized U.S. Treasuries have been a major driver, reaching more than $14 billion by April 2026, signaling strong institutional demand for using blockchain rails in traditional finance.
What traders are watching next
Traders are focusing on signals from SEC officials as they try to gauge how restrictive the eventual exemption might be. Peirce’s insistence on limiting any relief to direct tokenized representations of existing stocks suggests that products issued without corporate involvement, or synthetic tokens that only track prices, may face tighter scrutiny.
At the same time, infrastructure moves by major financial institutions, especially the New York Stock Exchange’s 24-hour tokenized securities platform being built with Securitize, are shaping market expectations for how tokenized equity trading could operate, regardless of the timing of the delayed innovation exemption.
Curious how tokenized assets work in practice? Explore real-world use cases in our guide on tokenized equities today.
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