Stock token trading: SEC move could reshape US markets

A $6.4 billion offshore market for tokenized stocks could move closer to US investors after Reuters reported that the Securities and Exchange Commission is preparing a path for crypto firms to offer stock-token trading. Such a move would take last week’s equity-rule rewrite out of the comment-file pile and put it into a fight over who can run stock trading beyond conventional exchanges.

The policy turns on the SEC’s effort to scrap Regulation NMS Rules 611 and 610(e), two provisions that The Block said were put in place in 2005. Reuters said the agency is also preparing an innovation exemption that could let tokenized-share venues operate while broader market-structure rules are rewritten. For regulators and brokers, that puts the story closer to market plumbing than crypto adoption: whether equities can begin trading on rails that look more like digital-asset venues. The report also raises the stakes around the SEC’s June 11 market-structure proposal, which analysts had already flagged as unusually important for tokenized equities.

SEC Chairman Paul Atkins said in the agency’s June 11 release that the rules had produced “unintended consequences” over two decades.

“After two decades of Rule 611, it is high time that the Commission review its unintended consequences that have hindered rather than enhanced the long-term growth of our markets.”

Paul S. Atkins, SEC

Rule 611, the trade-through protection, has been one of the clearest regulatory barriers between tokenized equities and a looser trading model. The Block’s analysis of the proposal said rolling back the rule removes a major policy obstacle for tokenized US stocks. It leaves the operational ones. Custody, clearing, settlement and venue registration still stand between a favorable SEC signal and a market that institutions can use at scale.

Who stands to benefit

If the exemption arrives, the first winners are likely to be platforms that already sit between crypto distribution and securities-style interfaces. Coinbase (COIN) has said it plans 1:1-backed tokenized US stocks whose holders would receive dividends, and Reuters said Robinhood (HOOD) and Kraken are circling the same market. Exchange-broker hybrids would have the clearest shot at testing longer trading hours, fractional access and on-chain settlement around familiar US shares. Coinbase’s proposal gives regulators a specific structure to examine rather than a generic plea for looser crypto rules.

Analysts are treating the NMS rewrite as more than a technical cleanup. Benchmark Equity Research told The Block that the proposal could be “the most consequential piece of regulation to impact the U.S. crypto space” this year because it would remove a rule set that long favored legacy equity venues. The first effect would probably not be a rush of volume away from the New York Stock Exchange or Nasdaq. It would be a gradual opening for new venues to argue that tokenized shares can match conventional stock access while offering a different settlement design.

Reuters cited CoinMarketCap data showing tokenized stocks already represent more than $6.4 billion in market value, most of it in offshore trading. The SEC’s move is reactive as much as experimental. Washington is not inventing demand for stock tokens. It is deciding whether some of that demand can come onshore under US supervision, with the SEC rather than offshore venues setting the ground rules.

What still has to happen

The next steps remain slow by trading-industry standards. The SEC proposal is open for public comment, and The Block said the formal comment period runs for 60 days. Reuters said the innovation exemption itself is still being prepared rather than finalized. That leaves a wide gap between a favorable policy signal and a venue that brokers, institutions and retail investors can use at scale.

Reuters quoted former SEC lawyer Ladan Stewart, now a White & Case partner, calling the plan a “significant win for the crypto industry”. Even that reading carries a caveat. The win, for now, is regulatory optionality rather than a finished market. The harder questions still sit in the plumbing: who holds the asset, how trades settle and which venues get permission to list tokenized shares without colliding with the existing stock-market stack.

For now, the clearest change is that the SEC has turned tokenized stocks from a fringe talking point into a live regulatory file. If Atkins follows through, the next US market-structure fight will not be over whether a token can represent a share. It will be over which firms get to list, route and settle that share once it does.