Coinbase shares climb, as SEC grants five-year path for tokenized stocks

The U.S. Securities and Exchange Commission (SEC) issued a five-year conditional exemption for trading tokenized stocks. This order creates a regulated pathway for companies like Coinbase to offer digital representations of U.S. equities. Coinbase shares rose following the announcement.

The Innovation Exemption framework allows qualifying Tokenized Securities Venues to operate without registering as traditional exchanges. These venues must ensure tokenized shares provide dividends and voting rights identical to conventional stocks. Issuers retain the right to object to the tokenization of their securities.

The SEC will use this temporary relief to study blockchain impact on securities laws while fostering innovation. Tokenized trading could enable 24/7 market access and faster settlement times. The SEC acted within its existing authority after the CLARITY Act failed to pass the Senate.