The Securities and Exchange Commission has put on hold a long-awaited “innovation exemption” for tokenized shares, delaying the release of the framework while it considers input from traditional exchanges and other market participants concerned about the sweeping effects of the plan, according to Bloomberg. Preparing reports.
The Securities and Exchange Commission, under Chairman Paul Atkins, He was preparing for release The so-called innovation exemption is due as soon as this week.
The framework will create a new regulatory pathway that allows digital tokens tied to shares of publicly traded companies to trade on decentralized cryptocurrency platforms — 24 hours a day, seven days a week — bypassing the restrictions of traditional exchanges.
The exemption is part of Atkins’ broader “cryptoproject.” initiativewhich aims to ease current restrictions on cryptocurrencies in line with the Trump administration’s pro-crypto agenda.
The SEC has reportedly been leaning toward allowing the issuance and trading of third-party tokens — digital representations of stocks like Apple, Nvidia or Tesla — without the approval of the underlying public companies.
This means that external actors, not issuers themselves, can create blockchain-based wrappers to track a company’s share price and list them on decentralized finance (DeFi) platforms.
These tokens may not carry traditional shareholder rights such as voting or dividends, though the SEC is considering requiring platforms to provide these rights or risk delisting.
Why is the SEC so late?
The timing of issuing the exemption has been delayed as the agency considers feedback from exchange officials and other market participants who have met with SEC staff in recent days.
World Federation of Exchanges – whose members include Nasdaq, Cboe, and CME Group – formerly to caution Such exemptions could “dilution” existing investor protections and “distort” competition by giving cryptocurrency exchanges a regulatory shortcut not available to traditional markets, the SEC said in a November 2025 letter.
The group warned that granting legitimacy to token stocks before implementing full compliance “will undoubtedly have negative — potentially severe — consequences” for US markets.
The tokenization debate is unfolding against a backdrop of competing visions for the future of US stock markets. Nasdaq, which received SEC approval in March 2026 for its tokenized securities proposal, is tracking A different model: A model that keeps all trades on the exchange while keeping full shareholder rights intact, built on the DTCC Foundation’s blockchain.
By contrast, an innovation exemption would sanction a parallel market for cryptocurrencies operating alongside the existing system — potentially fragmenting liquidity across dozens of third-party token issuers for the same underlying stock.
