The U.S. Securities and Exchange Commission is simultaneously opening up two entirely different paths for the on-chain development of U.S. stocks.

Written by: Zennon Kapron

Translated by: Chopper, Foresight News

The U.S. Securities and Exchange Commission (SEC) is about to introduce new rules for the tokenization of stocks. According to Bloomberg's news on May 18, the policy is expected to be implemented within a week. This new regulation will finalize a core issue that has been on hold for a year: whether tokenized stocks must be treated the same as traditional physical stocks.

This exemption is part of what SEC Chairman Paul Atkins refers to as "Project Crypto." It is widely believed that this move clears regulatory hurdles for on-chain stock trading, but the deeper strategies behind it go far beyond that. The U.S. Securities and Exchange Commission is simultaneously opening up two entirely different paths for the on-chain development of U.S. stocks, with two types of assets that are not the same financial products but will correspond to the stocks of the same publicly traded company.

Path One: Traditional Compliance Path on Wall Street

This path is built on the existing infrastructure of traditional financial markets. In March 2026, the SEC approved Nasdaq's revision of trading rules, officially allowing tokenized trading of the Russell 1000 constituents and index ETFs. Under this framework, traditional stocks and tokenized stocks enjoy completely consistent shareholder rights, share trading order books, and after T+1 clearing and settlement, follow-up settlement processes are unifiedly completed by the Depository Trust Company (DTCC).

DTCC announced on May 4 that it will launch industry pilot tests in July 2026, with over 50 financial institutions including BlackRock, JPMorgan, and Goldman Sachs participating, and full implementation by October. Initial covered subjects include Russell 1000 constituents, mainstream index ETFs, and U.S. Treasury bonds.

This channel is designed to be conservative and stable. DTCC manages assets with a scale of up to $114 trillion and will never recklessly implement radical experiments that impact shareholder rights confirmation systems. The tokenization under this model is merely adding an on-chain layer of packaging to the existing asset rights, with core shareholder registration information still retained in the traditional financial system; the on-chain tokens only represent ownership of the assets after the settlement is complete. While it allows for instant asset transfers and can be used as on-chain collateral, the actual trading settlement still follows the traditional T+1 rule, completed by the National Securities Clearing Corporation.

Path Two: Independent Channel for Native Crypto Market

This is precisely the core content of the new regulation highlighted by Bloomberg this week. Under this innovative exemption policy, native crypto trading platforms can launch tokenized stocks under loosened regulatory conditions; third-party institutions can independently issue on-chain tokens packaging their stocks without needing authorization from the listed company.

As early as January 28, the SEC released an official statement categorizing tokenized securities into two main categories: one is token assets officially or authorizedly issued by the listed company; the second is token assets issued by third-party institutions with no equity association. The regulation clearly defines: token issuance by the second category of third parties may not necessarily carry rights consistent with the underlying physical stocks, and holders may not necessarily enjoy corresponding shareholder rights.

This statement is the core key of this policy: The SEC tacitly allows for the creation of a special category of assets in the market, whose performance benchmarks the stock prices of listed companies such as Apple and whose trading patterns resemble individual stocks, but which are fundamentally not physical stocks.

Overseas Models Have Already Matured

These non-standard tokenized stocks are not a new concept; mature scales have already formed in overseas markets. In June 2025, the trading platform Robinhood, valued at $105 billion, first launched U.S. stock tokenized products for European users; in the same month, Backed Finance launched xStock token stocks on the Solana public chain; in September of the same year, Kraken launched over 60 tokenized U.S. stocks and ETF products for the EU region and formally acquired Backed Finance in December. Nowadays, Bybit, Binance Wallet, and Bitget Wallet have all launched similar tokenized stock products.

The industry's scale has achieved explosive growth. At the beginning of 2025, the total market value of global tokenized stocks was less than $30 million, soaring to $1.2 billion by the end of the year, an increase of 40 times over the year; the transaction volume of xStock alone exceeded $25 billion for the full year. Due to regulatory restrictions in the U.S., tokenized stocks had previously become the fastest-growing segment in the overseas RWA space, and now the new exemption regulations mean that this mature model is officially being introduced to the U.S. market.

Atkins' Regulatory Thinking and Implementation Rhythm

Atkins has never concealed his plans for the industry layout. In a public speech on July 31, 2025, he frankly stated that established financial institutions on Wall Street and technology companies in Silicon Valley have all applied to promote asset tokenization business, and the SEC would timely introduce relaxed regulatory policies to ensure the U.S. market keeps pace with industry trends. He also clarified the standards for the implementation of the exemption policy: projects must regularly report to regulators, implement a whitelist access mechanism, adhere to compliant token standards such as ERC-3643, and rely on a permissioned on-chain structure to bypass the stringent entry barriers of traditional brokerage licenses.

In February of this year, Atkins and SEC Commissioner Hester Peirce further finalized a temporary regulatory framework, setting trading limit caps, defining qualified trading counterparties, and establishing fundamental risk control principles for automated market makers. The relevant planning has been publicly disclosed throughout the process, but previously the market generally believed that implementation was still a long way off, and now the policy implementation is imminent.

The Two Development Paths Diverge

The Nasdaq + DTCC model fully adheres to the existing U.S. securities legal system, with stock codes, shareholder rights, and market regulatory rules remaining unchanged, only adding an on-chain token carrier at the end of the clearing and settlement process. The native crypto exemption channel does not have to adhere to the full set of traditional securities rules, allowing token assets to possess independent rights rules that can correspond to underlying stock assets, or be designed as securities swap products, derivative-linked financial products, and other asset types with different legal properties.

Brett Redfearn, founder of the industry tokenization platform Securitize and former head of the SEC's Trading and Markets Division, candidly pointed out the hidden risks: if third parties can issue common stock tokens without authorization, a single listed company could generate countless types of on-chain packaged assets. Multiple non-standard tokens trading concurrently would make it difficult for investors to determine the true value of the assets, and the market would be unable to establish a unified authoritative pricing standard; such concerns come from within the tokenization industry and are not traditional financial conservative viewpoints.

Liquidity Will Decide the Final Market Landscape

The head of Kraken's global consumer business previously stated that capital markets will not have a single development model, and a barrier-free, freely interchangeable on-chain token system is the core of the industry's technological breakthrough.

In simple terms, the Nasdaq compliance path belongs to a closed traditional ecosystem, while the native crypto path belongs to an open and free ecosystem. Crypto platforms operate 24/7 without interruption, with frictionless settlement cycles for tokenized stocks, which will continue to divert trading volume from the traditional T+1 U.S. stock market, even if these tokens do not inherently possess complete underlying equity ownership. The core competitiveness of these products has already shifted from legitimate equity ownership to efficient and flexible market pricing trading capabilities.

This new exemption regulation officially announces that the SEC will no longer rigidly adhere to a single centralized trading market structure for U.S. stocks. The traditional U.S. stock market is built on the National Market System Rule, with a core principle that "one stock corresponds to one authoritative trading market," thus ensuring optimal trade execution and unified market pricing rules. Atkins openly opposed this traditional rule as early as 2005 and has now explicitly stated that the widespread adoption of tokenized trading may prompt amendments to the National Market System Rule, with this exemption policy being the first step in the reform. In the next 1 to 2 years, the entire suite of core trading rules supporting the modern U.S. stock market landscape may undergo comprehensive reshaping.

Currently, the main resistance from the industry comes from the political level. Senator Elizabeth Warren and others have previously written to the SEC, questioning whether the relaxed exemption policy would allow market participants to easily evade existing securities regulations through crypto assets, and requested a response before May 8. However, the SEC is about to implement the new rules for tokenized stocks this week, already responding with concrete actions.

The European Financial Regulatory Authority has also issued risk warnings concurrently: ordinary retail investors may easily confuse third-party tokenized stocks with genuine physical stocks, mistakenly equating on-chain tokens with no shareholder rights to actual individual stocks, and this risk will be further amplified once the market is opened in the U.S.

Actual Impact on Listed Companies

For Russell 1000 constituents, in the short term, they will face a situation where the same stock is traded under two local trading systems concurrently, each with completely different clearing rules and counterparty risks. The corporate investor relations departments need to prepare for this: there will likely be numerous instances of third-party platforms issuing tokens for their stocks without authorization. Whether companies can safeguard their rights lawfully will depend on the specific legal attributes of the tokens. The regulated custodial equity tokens, derivative-linked products, and securities swap products correspond to different securities law provisions, and corporate legal teams must accurately distinguish categories before devising response plans.

For corporate treasury management teams involved in tokenized collateral assets, the risk management logic for the two types of tokenized assets is entirely different: tokens within the Nasdaq compliance channel are regarded as officially regulated securities, with clear and controllable rules for secondary pledges of assets; while third-party issued non-standard tokens pose significant counterparty risks. Even if the market price trends of the two types of tokens are highly synchronized, they cannot be equivalently exchanged in asset collateral business, and financial settlement teams need to establish two independent operational processes in the short term.