SEC-recognized tokenized shares: The beginning of a new era in the trillion-dollar financial market

Tokenized stocks have been officially recognized by the SEC as major trading and financial institutions have made significant decisions in recent weeks. This process could fundamentally reshape the traditional securities market. During a recent special meeting of the SEC Investor Advisory Committee, the issue of “regulatory placement of publicly traded tokenized stocks on blockchain” was discussed openly for the first time.

Nasdaq Model: A New Standard Recognized by the SEC

The integrated model proposed by Nasdaq is currently considered the most reliable solution recognized by the SEC. The main idea of this model is to apply blockchain technology in the back-office accounting system while keeping the front-office regulatory rules unchanged.

In this approach, tokenized stocks and traditional stocks share the same CUSIP codes, execution priorities, and economic benefits. The issuer still registers under the Securities Act, and the exchange operates under the Exchange Act. Trades contribute to the Nationwide Best Bid and Offer (NBBO) mechanism, and the existing market system continues to operate as it does today.

Nasdaq’s “internal system” model fully aligns with the SEC’s position: tokenization does not alter the nature of the asset, and tokenized securities are fully subject to federal regulations.

Recognition of Blockchain Infrastructure: The Updated Role of DTC

The Depository Trust Company (DTC) has taken a significant step toward creating a blockchain-based registration system. DTC’s approach ensures that tokenized stocks fully comply with existing standards. Transfer agents manage blockchain registries based on current regulations, with only the underlying database technology changing.

The development of DTC’s blockchain infrastructure is being monitored and recognized by the SEC. If current plans proceed, real-time trading could begin in the third quarter of 2026. At that time, tokenized stocks and traditional stocks will trade on the same exchange platform, with blockchain technology primarily optimizing back-office operations.

Existing Regulations and Adaptation of Tokenized Assets

SEC commissioners have clearly stated that tokenization, by its nature, falls within the existing regulatory framework. This view was reaffirmed at the recent meeting. The Senate’s “Responsible Financial Innovation Act” classifies tokenized stocks and bonds as official securities and strengthens SEC’s oversight authority, creating legal barriers to avoiding regulation.

While there are significant differences from current regulations that might be overlooked, the SEC maintains a position of recognition and support for all these developments. This process indicates an expansion of the SEC’s evaluative scope without fundamentally changing the main regulatory system.

Conditions for Recognition: Differences Between Original Tokenized Stocks and Wrapped Tokens

There are two types of tokenized stocks recognized by the SEC, with different rights. Original tokenized stocks are issued directly on the blockchain by the issuer — owners have full voting and dividend rights. These are fully recognized by the SEC.

Wrapped tokens, on the other hand, are common on other platforms — they only provide economic exposure, without the main shareholder rights. For example, tokens tracking Apple: in European markets, such tokens and the underlying shares often have significant price differences, and after a fall, investors realize they hold synthetic derivatives. SIFMA emphasizes that tokenization must preserve full legal and beneficial ownership; otherwise, it becomes a completely different product.

Regulatory Conflicts and the SEC’s Position

Regulatory conflicts are clearly layered. A low-conflict scenario involves the Nasdaq model, where tokenized stocks are replaced with traditional stocks. Existing rules permit viewing this as an innovation in settlement technology.

High-conflict scenarios include 24/7 trading, trading on non-NMS blockchain venues (disrupting the NBBO mechanism), and similar cases. The SEC has clearly stated its position in these scenarios — they cannot wait for recognition.

The main disagreement centers on “integrating blockchain into the existing system or building a new one.” The Nasdaq model advocates for the first approach: fully integrating blockchain infrastructure into the current regulatory framework. DTC and other organizations support this model.

Next Steps: Review and Recognition

This meeting was not about developing new rules but about expanding the SEC’s assessment scope. The final direction will depend on balancing technological innovation with existing regulations. Blockchain models recognized by the SEC involve billions of dollars in planned investments, and this direction will be further clarified in the coming quarters.