The U.S. Securities and Exchange Commission (SEC) is reportedly preparing to roll out a new framework for trading tokenized stocks on decentralized crypto platforms.
Citing people familiar with the matter, Bloomberg reports that the SEC is expected to release its so-called innovation exemption for tokenized stocks as early as this week.
The regulator is also likely to greenlight the trading of tokenized public-company shares that do not have the consent or backing of the issuer.
Tokenization of real world assets involves the creation of blockchain-based versions of assets such as stocks and bonds, which can be traded round the clock. The SEC categorizes tokenized securities as either those that are tokenized by or on behalf of the issuers and those tokenized by third parties.
The “third-party” tokens would effectively provide a new way to speculate on the price direction of stocks but may not carry the same benefits associated with normal stocks such as voting rights and dividends.
The report says that under the SEC’s proposal, platforms that cannot provide the benefits of normal stocks would lose the right to list the tokens. Officials of the agency are still working on the exemption though and the details may still change before its release.
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