Stock Market
By Steven Anderson
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What the Innovation Exemption Really Envisioned. Under Paul Atkins, the SEC was working on something quite radical.
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The World Federation of Exchanges Sounds the Alarm. The World Federation of Exchanges — whose members include Nasdaq, Cboe, and CME Group — sent a…
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Nasdaq Plays a Different Card. While the innovation exemption is stalled, Nasdaq is moving forward with its own approach.
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The SEC has hit the brakes. The innovation exemption meant to open U.S. stocks to blockchain — expected this week — is not being released. Not yet.
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The agency is stepping back to digest feedback from traditional exchanges and other market players who recently met with its staff.
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Under Paul Atkins, the SEC was working on something quite radical. The idea: allow third parties to issue digital tokens linked to listed stocks — Apple, Nvidia, Tesla — and…
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This was part of Atkins' "Project Crypto." The overall goal: to relax existing crypto restrictions, aligning with the Trump administration's pro-crypto agenda.
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No voting rights. Perhaps no dividends. Tokens that resemble stocks without all the legal attributes. That's where the issues lie.
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And the federation didn't mince words. Legitimize tokenized stocks before compliance is fully in place would, according to them, "undoubtedly have negative — potentially severe —…
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The SEC has evidently taken this seriously. Hence the delay.
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Related: SEC's Hester Peirce Puts Brakes on Tokenized Stock Exemptions as DeFi Pushes Hard
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The liquidity issue is real too. If dozens of third-party issuers can create tokens for the same underlying stock — say Tesla — liquidity fragments.
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While the innovation exemption is stalled, Nasdaq is moving forward with its own approach. In March 2026, the exchange received SEC approval for its own tokenized securities…
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This is the opposite of what the innovation exemption envisioned. Nasdaq wants blockchain, but within the existing framework.
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The two models can coexist on paper. But in practice, they pull in opposite directions. One would fragment markets. The other would consolidate them on new infrastructure.
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