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The Coin Rise 2025-07-03 14:20:16

Traditional Finance Pushes Back Against Tokenized Stocks: Details

A prominent Wall Street trade group has called on the U.S. Securities and Exchange Commission (SEC) to reject a growing number of requests from crypto companies seeking to offer tokenized stocks. The Securities Industry and Financial Markets Association (SIFMA), which represents major securities issuers and financial firms, expressed “significant concern” in a letter sent Monday to the SEC’s Crypto Task Force. These requests from crypto firms, which seek no-action or exemptive relief, would allow them to issue and trade tokenized equities outside the traditional regulatory structure. No-action relief would protect firms from enforcement action, while exemptive relief would enable certain products to bypass securities laws temporarily for testing purposes. SIFMA argued that granting such relief would allow crypto companies to distribute securities without adhering to critical investor protection requirements embedded within federal securities laws. The group urged the SEC to use its formal notice-and-comment process rather than granting immediate exemptions for tokenized securities. “These policy questions are too consequential to be handled through rushed exemptions,” SIFMA wrote, emphasizing the need for structured regulatory debate. SEC Considers Flexibility as Industry Seeks Clarity The letter comes shortly after SEC Commissioner Hester Peirce revealed in May that the agency is weighing a potential exemptive order for blockchain-based platforms aiming to issue, trade, and settle securities. Peirce noted that the current registration requirements may discourage firms from launching tokenized securities platforms, and limited trading venues could stifle innovation. “Exemptive relief could help break this chicken-and-egg cycle,” Peirce said, adding that companies should not be forced to comply with outdated regulations irrelevant to blockchain advancements. However, concerns persist about balancing innovation with investor protection. Bill Hughes, global regulatory lead at Consensys, noted that changes affecting retail access to securities should undergo a transparent rulemaking process rather than individualized exemptions. “This is a regulatory policy puzzle we need to solve,” Hughes remarked. Crypto Firms Push for Tokenized Stock Trading Crypto exchanges Coinbase and Kraken have shown interest in offering tokenized stock trading with regulatory approval. Coinbase’s legal chief, Paul Grewal, recently called the approval of tokenized equities a “huge priority” for the platform . Meanwhile, Kraken has launched tokenized stock trading on its platform, backed one-to-one by major U.S. equities such as Apple and Microsoft, though the service currently excludes users in the U.S., Canada, Europe, the U.K., and Australia, reflecting the complex legal environment. The post Traditional Finance Pushes Back Against Tokenized Stocks: Details appeared first on TheCoinrise.com .

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