SEC Commissioner Peirce Rules Out Synthetic Tokens From Forthcoming Tokenized Stock Exemption

According to a post on X on Thursday (May 21), SEC Commissioner Hester Peirce clarified that the agency's forthcoming innovation exemption for tokenized stocks would be "limited in scope," covering only digital representations of existing public equities. The statement rules out synthetic tokens that mimic stocks without granting full investor ownership rights.

Peirce wrote: "I've always expected that it'd be limited in scope and would facilitate trading only of digital representations of the same underlying equity security that an investor could purchase in the secondary market today." The clarification narrows market expectations following a Bloomberg report on May 18 that had fueled speculation the SEC might allow broader on-chain equity products under lighter regulatory rules.