- The SEC is drafting a plan to enable the trading of tokenized stocks on blockchain networks, potentially allowing 24/7 trading.
- Nasdaq has filed a proposal to allow tokenized stocks to be traded on its platform, marking a significant step in the process.
- Major exchanges like Coinbase and Robinhood are preparing to support tokenized equities, indicating strong market interest.
The U.S. Securities and Exchange Commission (SEC) is working on a proposal to allow stocks to be traded on blockchain networks, much like cryptocurrencies. This move is part of a larger effort to enable the trading of tokenized stocks, making them more accessible and opening new avenues for trading. With this plan, tokenized stocks could trade around the clock, giving investors greater flexibility.
These are developments that Nasdaq leads. The exchange has submitted a proposed rule change to the SEC, seeking to allow the trading of tokenized stocks on its exchange. With its acceptance, it may add more efficiency to the stock trading process, as blockchain may allow quicker settlement and enhance its visibility. The increasing popularity of the tokenization of traditional financial assets is reflected in the proposal of Nasdaq.
Businesses Shift to Stock Tokenization.
A number of firms already perform tokenization of their stocks. In one instance, Galaxy Digital, under the leadership of Mike Novogratz, was the first publicly traded company to issue its common stock as tokens on Solana. Other corporations, such as SharpLink and Forward Industries, are doing the same, as they aim to tokenize their stock on Ethereum and Solana, respectively. The moves are an indicator of the increasing tendency to convert the traditional assets into digital equivalents that can be exchanged on blockchain platforms.
Large crypto exchanges like Coinbase and Robinhood are standing to enable tokenized stock trading. Coinbase, especially, is ready to launch tokenized equities through its platform. Robinhood already makes these tokenized stocks available to its European customers. This endorsement by leading exchanges plays a vital role in the implementation of blockchain-based stocks, which will open the path to wider adoption in the future.
Discussions on Regulation are being held.
These strategies of the SEC have triggered debates among the major financial stakeholders. The crypto task force of the commission has also convened with the representatives of the New York Stock Exchange (NYSE) to discuss the legal and regulatory issues of tokenized equities. These gatherings are aimed at establishing regulatory frameworks that would help to trade tokenized stocks. The SEC also strives to develop the required regulations to provide a seamless introduction of stock trading based on blockchains.
