A seismic shift for global finance as the US regulator brings the $75 trillion plus US equity market into the digital age
As the tokenization market is predicted to quickly top trillions of dollars in securities within a few years, global participants in the tokenization sector are lauding the Securities and Exchange Commission’s new rules to support digital securities. The transition to digital securities makes sense as there is potential to automate certain characteristics of the asset, reduce intrinsic friction to the issuance/management/transfer of the asset, and to open up a new world of new assets for investment – ones previously too costly to offer to a wider investor audience.
Industry insiders have welcomed the new “Innovation Exemption” published by the Securities and Exchange Commission this week. The SEC order marks the first time a major global regulator has authored requirements into a formal regulatory order. With the new US rules, tokenization adoption will accelerate globally.
Nick Magliocchetti, Director of S01 Issuer GmbH, sees the tokenization market skyrocketing to $5.5 trillion by 2030 from around $17 billion today.
S01 Issuer GmbH issues the ST0x token under a Base Prospectus approved by the Liechtenstein FMA and passported across the EEA, and it represents a one-to-one, fully redeemable Right of Exchange into the underlying shares held with regulated custodians. Secondary trading runs on public onchain infrastructure on Base. ST0x has been operating live tokenized equities in Europe under an approved prospectus since March 2026,
“The SEC has now provided a clear and safe path for global asset managers, major banks and infrastructure firms to aggressively scale up tokenized offerings. This regulatory milestone will rapidly accelerate the growth of the tokenized equity market by bridging traditional capital markets with public onchain trading infrastructure. The SEC order signals an era where regulators on both sides of the Atlantic agree on a core principle: a tokenized equity is defined by the holder’s explicit legal rights, not simply the price it tracks.”
Magliocchetti says they see a future where every asset is tokenized and available to everyone:
“The SEC has given the market a clear direction, and we welcome it.”
Richard Baker, CEO & Founder of UK-based Tokenovate, says that tokenized shares may trade around the clock but can only move as fast as the infrastructure supporting it:
“The SEC’s five-year exemption gives firms a regulated environment in which to develop this model in the US, with investor rights and issuer involvement built in. As trading becomes continuous, settlement and collateral processes must keep pace. Common standards and legal certainty will be needed so that tokenized assets can be recognized and managed consistently across platforms and markets. Without that foundation, the industry risks carrying the same fragmentation into a new market structure.”
Offchain CEO and co-founder Steven Goldfeder says the Innovation Exemption is a meaningful step in onchain markets and a programmable economy.
“The exemption gives tokenized securities venues a real, workable path to operate in the US, and it validates the model we’ve been building toward. Robinhood Chain, built on Arbitrum, has shown how quickly mass adoption of tokenized equities will happen, all without having tapped into the U.S. market yet. This exemption continues to push the approval of institutional-grade tokenization in production in America, and clear rules like this are what let platforms move from pilot to scale. Arbitrum’s recent milestone of surpassing 5,000 RWAs supported on the network is a clear signal that this market is waiting to erupt and the rails are in place to allow this moment forward.”
Bitget Wallet COO Alvin Kan says a token that tracks a stock price is not the same as owning the stock. “Putting both on a blockchain doesn’t erase that difference.”
“Tokenized equities are increasingly developing along two different models, but the more useful distinction is what the token legally represents rather than simply whether it is US-based or offshore. Under the SEC exemption, a tokenized National Market System (NMS) stock must give holders the same rights and privileges as the equivalent traditional share, including economic interest, dividends, voting rights, and liquidation rights. Synthetic exposure is explicitly outside the scope of the exemption, and issuers can object when an unaffiliated third party tokenizes their stock. That is materially different from many crypto-native tokenized equity products globally, where the token may instead represent price exposure or a contractual claim against an intermediary. For users, the potential improvement is meaningful: self-custody, fractional ownership, around-the-clock trading and near-instantaneous settlement. The SEC itself identifies these as potential benefits.”
Kan says tokenization does not automatically create a better product if access is heavily permissioned, liquidity is shallow, and multiple intermediaries are involved. Blockchain could modernize the back end without changing the front-end experience.
“The real test is whether tokenization reduces settlement, reconciliation, and distribution friction, not simply whether the stock has been put onchain.”
Kan added that the collapse of the CLARITY Act in the Senate shows that the SEC can use its existing authority to create a pathway for tokenized securities.
“The [Innovation Exemption] expires five years after publication, remains subject to symbol and volume limits and modification, and is explicitly intended to inform future rulemaking. That is enough clarity to justify pilots, integrations and modular infrastructure today, but long-duration capital will still distinguish between a five-year exemptive order and a framework embedded in final rules or legislation.”