SEC near release of innovation exemption for tokenized securities

At the Economic Club of Washington on Tuesday, SEC Chair Paul Atkins announced the agency is close to issuing an ‘innovation exemption’ that would permit limited on-chain trading of tokenized securities within a compliant framework while the SEC develops longer-term rules.

The exemption would create a narrow, structured pathway for firms to facilitate trading of blockchain-based securities in the United States, allowing controlled experimentation while staff draft broader market-structure rules. Agency officials describe the relief as temporary and narrowly tailored.

At the event, Atkins called the proposal a “cabined framework to begin facilitating the trading of tokenized securities onchain in a compliant fashion as the Commission works toward long-term rules of the road.” He noted the measure has been under internal discussion for several months.

The announcement follows earlier SEC actions. On March 17 the agency issued interpretive guidance that laid out a token taxonomy grouping digital assets into categories such as digital commodities, collectibles, tools and stablecoins, and identified tokenized securities as squarely within the SEC’s jurisdiction. On March 24 the SEC sent that proposed interpretation to the White House for review; government records list it as pending.

Commissioner Hester Peirce has described the exemption as a way to permit limited experimentation while staff assess how existing securities laws apply to on-chain markets.

Atkins did not disclose details on the scope, eligibility criteria or specific compliance requirements for the exemption. The SEC said further staff guidance is expected before any exemption is published, and coordination with other agencies could affect timing.

Officials say the exemption and the taxonomy aim to clarify lines between the SEC and the Commodity Futures Trading Commission and to provide compliance pathways for firms seeking to issue or trade blockchain-based securities in the U.S. The agency expects the relief to address some market activity that has shifted offshore because of unclear regulatory treatment.