I just finished discussing the clear bill this morning, but the legislation in Congress has been hindered. However, the SEC and CFTC still have many tools in their hands, and the two institutions can gradually establish an "executive version market structure". The SEC immediately took action, issuing a temporary and conditional "innovation exemption": the SEC allows eligible "tokenized Securities Venues" (TSVs) to use licensed automated market makers and liquidity pools to trade tokenized NMS stocks (i.e., publicly traded stock tokens in the US stock market system) on the chain, and under certain conditions, these venues do not need to be recognized as "exchanges" under the Securities and Exchange Act; Some participants who provide their own liquidity to the pool do not need to be identified as "dealers" for the time being. The exemption period is about 5 years, and public opinions are solicited to explore the possibility of formal rules or legislation in the future. The purpose of SEC Chairman Atkins is clear: if Congress fails to push forward the CLARITY Act this week, the SEC will take this step within its statutory authority to "bring the US capital market into the digital age". This is also referred to as a bridge to more enduring rule making by him. Let's talk in detail about what this policy allows and does not allow 1. Permitted core: 1) Convert listed US stocks into on chain tokens and match transactions in licensed AMM/liquidity pools. 2) TSV brings buyers and sellers together: provides AMM liquidity pool and sets who can enter the market for trading. 3) Tokens must provide holders with the same rights as traditional stocks, including dividends, voting, etc., and cannot just be a composite exposure of "up and down". 4) Tokens can be minted by the issuer themselves (or their representatives), or by third parties unrelated to the issuer; But if it is a third-party casting, TSV must notify the issuer in writing and give the other party the opportunity to object. There are reports that the window is about 30 days, and if the issuer vetoes it, trading cannot be conducted on that platform. Clearly identify the stuck point (very important) 1) Not a synthetic stock, not a packaging token that only tracks prices. The SEC emphasizes' No Synthesis'. This is pouring cold water on many "US stock tokens/synthetic stocks" products in the current cryptocurrency market, not giving a green light. 2) It is not a pure DeFi that is permissionless and freely traded by the public. Participants must be licensed, TSV must be a US entity, and comply with OFAC sanctions compliance. 3) Smart contracts must be auditable, publicly available, and deployed on open, permissionless distributed ledgers; Transactions must be publicly disclosed; When the underlying stock is suspended from trading on the main listed exchange, the token must also be suspended from trading simultaneously. 4) It is a pilot project, not a complete replacement of the New York Stock Exchange/Nasdaq, with a limit on the number of targets and trading volume, and controls based on the limit up and limit down levels. 5) Expires in 5 years, unless further rules, extensions, or legislation are implemented. The impact and significance on the industry 1) For 'real tokenized US stocks', it is a milestone, but not for' synthetic US stock tokens'. A truly 1:1 stock token with shareholder rights now has a relatively clear and operational regulatory channel in the United States for the first time: there is no need to immediately register with a national securities exchange, and AMM can be used for secondary trading. This is a substantial benefit for tokenization companies like Securitize that follow the compliance route, as well as brokers/infrastructure providers who want to put the US stock on the chain. 2) Traditional exchanges, securities firms, and transfer agents may feel pressure and be forced to transform. If on chain settlement, T+0/near instant delivery, and programmable company actions can really run, some functions of existing central counterparties, clearing houses, and transfer agents will be diverted. At the same time, the issuer has the right to object, which means that companies such as Apple and Nvidia can refuse third-party unauthorized "on chain trading" of their stocks. This will shift the market from "anyone can issue US stock tokens" to a "issuer consent+compliance venue" model. 3) For encrypted public chains and DeFi, it is a 'conditional access', not a comprehensive DeFi for Wall Street. The contract must run on a public permissionless chain, which brings potential settlement layer opportunities to public chains such as Ethereum and Solana; But the transaction itself is licensed, subject to KYC/sanction screening, and has capacity limitations. 4) At the market structure level, this is a regulatory sandbox of "pilot first, then legislation/regulation". The SEC itself also says that this is a midway point towards formal rules or congressional legislation. It will accumulate real data on stock trading on the chain (price, quantity, time, pool address, end of day pool size, etc. to be regularly disclosed), which will be used to determine whether AMM will impact the best quote, cause manipulation, and withdraw liquidity from the lit market. So the short-term symbolic significance is greater than immediate volume increase. This exemption can be seen as a combination of three things: 1) Political alternative: The CLARITY Act did not pass, and the SEC used Section 36 of the Exchange Act exemption to make a cut first. 2) Regulatory experiment: Using limited targets, limited scale, and publicly available data, observe whether tokenized stocks can operate without destroying the integrity of the existing market. 3) Industry filter: Reward "real equity tokens+licensed venues+compliant market making", while ignoring "unauthorized synthesis tokens+unlicensed global stocks (continuing to be in the gray area and cannot be prohibited)". For the first time, US regulatory agencies have acknowledged that on chain AMMs can serve as a legitimate experimental ground for secondary trading of listed stocks.