Tokenization is moving faster than Washington
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
On September 17, 2026, the U.S. Securities and Exchange Commission (SEC) introduced a temporary "Innovation Exemption" to allow limited trading of tokenized U.S. stocks on qualified blockchain venues without SEC registration. This framework permits experimentation for five years under specific investor protections and regulatory restrictions. The author, Andrew Cuomo, co-chair of a joint venture between Intercontinental Exchange and OKX, views this as a major regulatory step integrating blockchain technology within mainstream capital markets.
Why it matters
The SEC's Innovation Exemption signals a regulatory approach that balances financial innovation with investor protection, allowing blockchain-based securities trading to develop within defined guardrails. The move addresses uncertainty in U.S. regulation, aiming to attract investment by creating a clearer framework amid fast technological advances. This development suggests that the U.S. market is working to keep pace with blockchain progress, which is also being actively considered by regulators in Europe.
Key context
Prior to this, tokenization of U.S. equities on blockchain was theoretical rather than practical. The SEC exemption comes shortly after the U.S. Senate failed to advance a broader Digital Asset Market Clarity Act, which would have clarified digital assets regulation. The new exemption represents a temporary, conditional regulatory experiment rather than permanent rulemaking. It requires tokenized shares to mirror rights of traditional shares, imposes trading limits, and includes issuer protections and transparency rules.
Key numbers and entities
SEC (U.S. Securities and Exchange Commission), Intercontinental Exchange (parent of NYSE), OKX, Andrew Cuomo (former Governor of New York and OKX board member), SEC Chairman Paul Atkins, Digital Asset Market Clarity Act. The exemption lasts five years and was announced on September 17, 2026. The Senate failed a cloture vote on this act with 49 votes.
What remains unclear
Details on the specific tokens and venues that qualify under the exemption are not provided. The long-term regulatory framework beyond the five-year exemption period remains uncertain, as does how the exemption will interact with future legislation or SEC rulemaking. The practical impact on market liquidity and investor behavior during this experimental phase is also not addressed.