U.S. securities regulators are preparing a five-year “innovation exemption” that could allow tokenized versions of U.S.-listed shares to trade on public blockchains while preserving the legal rights attached to conventional stock ownership, according to Taylor Lindman, chief legal counsel to the SEC Crypto Task Force.
The proposed route would give eligible platforms a temporary framework to test blockchain-based equity trading before permanent rules are written. Lindman said the first participating platforms could publish operating plans as soon as the next quarter. Any tokenized share operating under the exemption would need to retain core shareholder protections, including dividend entitlements and voting rights.
That condition places the proposal closer to a regulated securities-market experiment than to the synthetic stock products that have appeared in parts of the crypto market. A token tracking a share price without ownership rights would not offer the same claim on a company as a traditional equity. Requiring dividends and voting rights would link the digital token to the legal and economic features that make a share an actual security.
Public blockchains could host regulated equity markets
Commissioner Hester Peirce said eligible platforms could use permissioned automated market makers and liquidity pools to support trading in tokenized U.S. equities on open, permissionless blockchains. An automated market maker uses smart contracts and pools of assets to quote prices and match trading activity, rather than relying entirely on the order-book structure used by stock exchanges.
The distinction between a permissioned trading mechanism and a permissionless blockchain is likely to shape the experiment. The underlying ledger could remain publicly accessible, while the entities providing liquidity, operating the trading venue, or handling customer access would face eligibility rules and compliance requirements.
Peirce described the exemption as a bridge toward longer-term regulation and said current transaction-size caps would be sufficient for commercial operations. That approach could allow regulators to observe how tokenized equities behave in live markets without immediately redesigning the full structure of U.S. securities rules.
The framework also puts practical pressure on platforms seeking to offer tokenized stocks. They would need systems capable of reconciling onchain trading with shareholder records, corporate actions, custody arrangements, anti-money-laundering obligations, and securities-law disclosures. Dividends, stock splits, mergers, proxy voting, and trading halts are routine features of public equity markets, but they become more complex when ownership moves through smart-contract infrastructure.
Tokenized equities have attracted interest because blockchain settlement could shorten the chain of intermediaries involved in transferring securities and potentially support round-the-clock market infrastructure. The SEC’s apparent preference for preserving shareholder rights indicates that speed and programmability alone would not qualify a product as a regulated tokenized share.
Corporate moves extend the tokenization push
Several companies are positioning around the infrastructure needed for tokenized financial products and stablecoin-based payments.
Circle Internet Group disclosed in an 8-K filing that a counterparty completed a $100 million equity purchase on Sept. 17, acquiring about 1.237 million Class A shares at $80.84 each. The shares are subject in principle to a lockup that can last up to two years, although voting rights remain with the holder during that period.
Circle also entered a five-year USDC cooperation agreement with the same counterparty. Under the deal, Circle will pay monthly incentive fees calculated in proportion to USDC held through the counterparty’s Modular Smart Contract Wallet infrastructure services. The arrangement is intended to expand USDC distribution into additional markets.
The agreement illustrates how stablecoin issuers are using commercial distribution partnerships to extend the reach of dollar-linked tokens. Wallet infrastructure has become a strategic part of that effort because it determines how users hold, transfer, and access stablecoins across applications.
Apple and Google have also advertised roles involving stablecoins, tokenized deposits, blockchain payments, and tokenized real-world assets. Apple posted an Apple Pay financial products strategy lead position that lists experience with stablecoins, tokenized deposits, and blockchain among preferred qualifications. Google advertised a Hong Kong-based industry chief architect role for Google Cloud’s Asia-Pacific Web3 and digital-assets business, with preferences including experience in real-world-asset tokenization, stablecoin payment networks, custody, and tokenized deposits.
Neither job posting amounts to a product launch. The roles nevertheless show that payment and cloud providers are building expertise in areas that overlap with the SEC’s tokenized-securities agenda: digital representations of traditional financial claims, blockchain settlement, secure custody, and regulated access to public networks.
Nasdaq data reaches Pyth’s onchain market
Pyth Network said it has become an external data distributor for Nasdaq Basic and integrated Nasdaq’s U.S. equity real-time quote and trading products into the Pyth data market.
Market-data distribution is a less visible but necessary layer for tokenized securities. Onchain applications that reference equity prices need reliable data feeds to calculate collateral values, trigger settlements, and support trading systems. Nasdaq data delivered through Pyth could give developers a more direct way to incorporate U.S. equity information into blockchain applications, subject to the licensing and usage limits that govern the data.
The arrangement does not itself create tokenized Nasdaq-listed shares. It does, though, connect a major source of U.S. market data to blockchain infrastructure as regulators consider conditions under which actual equity ownership could also move onchain.
Prediction markets seek a larger role
The push to broaden market infrastructure is also reaching event-contract platforms. Kalshi has asked the Commodity Futures Trading Commission for permission to offer margin trading, a step that would allow eligible users to borrow against collateral when taking positions.
Margin would increase the capital efficiency of prediction-market contracts but would also introduce greater loss and liquidation risks. The request arrives as such platforms move beyond sports and political markets into products linked to economic data, financial outcomes, and other events.
Robinhood reported $156 million in event-contract revenue for the second quarter of 2026, up more than tenfold from a year earlier. It said users traded 13.6 billion event contracts during the quarter, while August volume reached 4.7 billion contracts, roughly 15 times the level recorded a year earlier.
Bernstein projected that annual prediction-market trading volume could reach $10 trillion by 2035, compared with an estimated $410 billion in 2026. The firm expects crypto, equities, and commodities to account for 49% of total volume by 2035, exceeding sports-related activity.
Those forecasts depend on regulatory approvals, product design, and whether platforms can manage the risks that come with more complex financial contracts. Kalshi’s margin request indicates that the next phase of competition may center on trading mechanics as much as on the range of events available for speculation.
A regulated test for onchain ownership
The SEC exemption outlined by Lindman and Peirce would give tokenized-equity platforms a route to demonstrate whether public blockchain settlement can work without stripping shareholders of the rights they receive in conventional markets. Its five-year duration also gives regulators a defined period to evaluate trading, custody, liquidity, governance, and consumer-protection outcomes before deciding whether broader rules are warranted.
For platforms, the test will be whether they can combine open blockchain rails with the operational discipline of securities markets. For traders, the practical question will remain straightforward: whether a token represents legally recognized ownership, including dividends and voting rights, or merely tracks the price of a stock.
Curious how this experiment could reshape markets? Explore the future in this in-depth guide on tokenized equities.
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