The SEC is reportedly preparing a framework that would let firms test tokenized securities without full registration.
The US Securities and Exchange Commission (SEC) is expected to publish an innovation exemption for tokenizedsecurities as early as this week, Bloomberg reported on Monday, citing sources familiar with the matter. The framework would allow traditional financial institutions to test blockchain-based securities without completing a full registration process.
The SEC has been steadily expanding its engagement with tokenized assets over recent months. In March, the agency approved a rule change permitting Nasdaq to support the trading of tokenized shares. In April, it approved a similar rule change for the New York Stock Exchange, which is developing a 24/7 platform for trading and on-chain settlement of tokenized securities.
In December, the SEC authorized the Depository Trust & Clearing Corporation to tokenize certain highly liquid assets on pre-approved blockchains under a three-year authorization period. Despite this activity, the agency has consistently stated that tokenized assets remain classified as securities and subject to federal securities law.
Blockchain-based tokenized securities offer faster settlement, lower intermediary costs, and round-the-clock trading availability compared to traditional equities, which are constrained by fixed market hours and multi-day settlement timelines.
Analyst projections for the tokenized asset market vary widely. Estimates put the market size anywhere between $2 trillion and more than $10 trillion by 2030, with many in the industry expecting substantial growth over the next decade.
The SEC's forthcoming exemption framework is seen as a key step toward enabling broader institutional participation in tokenization, following a period in which the agency approved individual entities on a case-by-case basis rather than providing a unified regulatory pathway.
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