The U.S. Securities and Exchange Commission (SEC) has been embracing blockchain initiatives, and this time, it has advanced a plan to enable blockchain-based stock trading — allowing stocks to trade like cryptocurrencies on the blockchain. This move classifies shares of companies like Tesla, Apple, and Nvidia as digital tokens on a decentralized ledger.
Recently, SEC Commissioner Hester Peirce stated that the commission is prepared to collaborate with industry participants on tokenizing products, and the latest move is reportedly part of the SEC’s broader vision to tokenize assets on blockchain and blockchain stock trading.
Tokenization is the process of converting equity or other traditional assets into digital form on a blockchain.
The new proposal recommended by the SEC would allow investors to trade tokenized equities on approved crypto platforms, according to a report from a media outlet.
Authorities are highly vocal on tokenization
Commissioner Peirce has already mentioned tokenization during several speeches. She once stated that blockchain has unlocked new models for distributing and trading securities in a “tokenized” format.
SEC Chair Paul Atkins depicted tokenization as an innovative method that the agency does not look to restrict. In a keynote address at the Crypto Task Force Roundtable on Tokenization, Atkins remarked: “Tokenization can also enhance capital formation by transforming relatively illiquid assets into liquid investment opportunities.”
Tokenization boost amid increased adoption
Amid the growing support for tokenization, several companies have recently eyed tokenization. Earlier this month, Nasdaq filed with the SEC to allow tokenization and blockchain listing of stocks.
Crypto exchange Coinbase has also made a remarkable move seeking SEC approval to offer tokenized US equities to its customers.
Worth noting, Real World Asset (RWA) tokenization has reached a staggering volume of over $27 billion, signaling increased adoption of blockchain within traditional finance.
