NEW YORK, June 17 : U.S. equity markets face a potential shakeup as the Securities and Exchange Commission readies a new policy that would allow crypto companies to offer blockchain-based stocks, analysts and lawyers said.

The crypto industry says tokenized stocks — blockchain-based instruments that track traditional equities — could revolutionize stock markets by allowing shares to be traded 24/7 and settled instantly, boosting liquidity and reducing transaction costs.

Crypto industry insiders expect President Donald Trump's SEC chair, Paul Atkins, to unveil an "innovation exemption" soon. Atkins has said this would allow companies to experiment with new digital asset business models without having to comply with all of the SEC's disclosure and investor-protection rules. Most notably, the exemption is expected to allow firms to offer trading in tokenized versions of existing U.S. stocks.

CRYPTO EXCHANGES READY TOKENIZED STOCKS

Prominent crypto players including Coinbase  have signaled that they plan to launch tokenized stocks in the United States when the rules allow. Robinhood, Kraken and several other crypto exchanges already offer tokenized stocks overseas, while Coinbase on Tuesday announced it would soon launch such products outside the U.S. 

While Atkins has previously said the innovation exemption will be temporary and limited, over the long term it could pave the way for major structural changes to equities markets, bringing such crypto upstarts into direct competition with traditional brokerages like Morgan Stanley's E*Trade and Charles Schwab, said analysts and attorneys. Some regulatory experts and traditional Wall Street companies have warned that tokenized stock trading could create new risks for the system and investors, depending on how the exemption is structured. 

The combined global value of tokenized public stocks geared toward retail investors has grown rapidly since the end of 2024,  when the market was worth just a few million dollars, according to RWA.xyz, which tracks tokenized assets. The market capitalization of tokenized stocks now stands at more than $6.4 billion, according to data provider CoinMarketCap.

Ladan Stewart, the global head of fintech and a partner at White & Case, said the innovation exemption would be a "significant win" for the crypto industry. It could potentially allow crypto firms to perform various stock market functi...