Breaking: SEC Moves To Allow On-Chain Stock Trading Alongside Crypto Amid Tokenization Push
Highlights
- SEC is drafting a plan to allow stocks trade on blockchain networks.
- Trading of these tokenized stocks could begin soon as the commission moves to approve proposed rule changes.
- Coinbase and Robinhood are reportedly lobbying for a fast rollout.
The U.S. Securities and Exchange Commission (SEC) is reportedly moving to approve proposals that will enable stocks to trade on-chain just like crypto. This comes as more companies look to tokenize their stocks for easier access.
SEC Working On Plan For On-Chain Stock Trading
According to The Information report, the commission is moving to allow stocks to trade like cryptocurrencies as it is currently drafting a plan for these assets to trade on blockchain networks. The agency plans to let crypto tokens represent shares, possibly enabling 24/7 trading of these assets.
As CoinGape reported, Nasdaq had filed a proposed rule change with the SEC to allow trading of tokenized stocks on its platform. The exchange proposes that these stocks trade similarly to traditional stocks, with mechanisms in place to enable the settlement of tokenized trades.
Meanwhile, companies are already moving to tokenize their stocks, with Mike Novogratz’s Galaxy Digital becoming the first Nasdaq company to tokenize its common stock on Solana. Solana treasury company Forward Industries is also looking to tokenize its FORD stock on Solana.
Ethereum treasury company SharpLink has also recently revealed plans to tokenize its SBET stock on Ethereum, making it the first company to do so on the Ethereum blockchain. On-chain stock trading could happen sooner rather than later, as top crypto exchanges Coinbase and Robinhood are lobbying for a fast rollout.
Notably, these two crypto exchanges already have plans to enable the trading of tokenized equities on their platform, with Robinhood already offering these tokenized stocks to its European customers.
Meanwhile, as part of the SEC’s plans to allow on-chain stock trading, the crypto task force recently met with representatives from the New York Stock Exchange (NYSE). According to the meeting memo, one of the agenda items was considerations regarding the trading of tokenized equities and structures for facilitating such trading.
This included the legal and regulatory considerations implicated by the tokenization of equities. Additionally, both parties discussed the regulatory treatment of specific models of tokenization and the regulatory processes required for implementing new models.
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