Tag: Regulation & Policy

SEC Eyes Tokenized Equity Pilot as Clarity Act Advances

Following the Senate Banking Committee’s approval of the Clarity Act, SEC Chairman Paul Atkins is anticipated to introduce an “innovation exemption” framework for tokenized stock trading. This move could pave the way for 24/7 on-chain equity markets on regulated Alternative Trading Systems (ATS).

The tokenized stock market is already gaining traction, independent of legislative progress. Data indicates that distributed value has reached $33.7 billion, a 21% increase in the last 30 days, with monthly transfer volume hitting $3.03 billion. This momentum provides a tangible market context for the regulatory push, rather than just a theoretical policy discussion. This is a bullish signal for RWA tokenization infrastructure and compliant on-chain equity platforms.

Regulatory Framework and Infrastructure

The SEC’s proposed “innovation exemption” does not represent a complete overhaul of securities law. A joint staff statement from three SEC divisions in January 2026 clarified the regulatory stance: tokenization does not alter the fundamental characteristics of a security, and existing disclosure obligations, custodial requirements, and investor protections remain in effect, regardless of whether a stock trades on a blockchain ledger.

The practical infrastructure is supported by the DTC Pilot, a three-year no-action relief granted to DTCC’s DTC in December 2025. This pilot is limited to highly liquid, DTC-eligible securities and mandates real-time regulatory observability and detailed participant reporting – obligations that will apply to any ATS utilizing the same settlement rails. In March 2026, the SEC approved Nasdaq’s rule change to permit trading of tokenized versions of DTC-eligible equities and ETPs, using the same ticker, market rules, and economic rights as the underlying shares.

The Atkins framework expands upon this logic. Bloomberg reports that the plan encompasses both tokenized stocks issued directly by or on behalf of issuers and third-party tokenized stocks without direct issuer affiliation. This distinction is crucial for secondary-market liquidity and alternative trading system design. These two categories have different disclosure obligations and custodial structures.

Market Leaders and Growth

Ondo, built on Ethereum, currently dominates the on-chain stock market, holding 60% of the market share. Tokenized Circle Group stocks represent approximately $212 million in value, while tokenized NVIDIA Corp. and Tesla Inc. are valued at $89.3 million and $85.4 million, respectively. These three stocks alone account for over 25% of the total tokenized stock value, spread across more than 266,000 holders and 83,257 monthly active wallets.

The Role of the Clarity Act

The passage of the CLARITY Act is a critical factor. The bill has cleared the Senate Banking Committee, but requires 60 votes on the Senate floor to overcome a filibuster. Republicans hold 43 seats, meaning pro-crypto advocates need at least 17 Democratic votes. Polymarket currently estimates the probability of a 2026 floor vote at 64%.

If passed, the CLARITY Act would shift primary regulatory oversight of crypto trading from the SEC to the CFTC, with a specific carve-out retaining digital securities oversight at the SEC. This jurisdictional shift is significant, determining the rulebook governing tokenized equity ATS platforms, how margin and leverage rules apply, and which agency has enforcement authority over platforms like Ondo.

Future Outlook

If the CLARITY Act passes in July 2026, with the support of seventeen or more Democratic senators, the SEC’s innovation exemption framework will launch concurrently with new ATS licensing. Tokenized stock distributed value, currently at $1.43 billion, could accelerate to $5 billion by year-end as institutional platforms gain regulatory cover.

NYSE has already partnered with Securitize to develop tokenized securities markets, and at least one other U.S. exchange has outlined plans for 24/7 tokenized trading with stablecoin settlement, indicating that Nasdaq’s pilot model will not remain unique, regardless of the legislative outcome.

The SEC’s broader regulatory approach under Atkins is clearly shifting towards structured engagement rather than prioritizing enforcement. The blockchain regulation framework is evolving, with the support of 17 Democratic votes being the only variable the market cannot yet confidently predict.

ONDO surged approximately 16% following reports that the U.S. Securities and Exchange Commission (SEC) is preparing a framework that could permit tokenized versions of stocks to trade on cryptocurrency platforms. This development could provide a regulatory boost to one of the most prominent players in the real-world asset sector.

Market Reaction

ONDO traded near $0.390, reflecting a 15.5% increase over 24 hours, with a daily volume of about $228 million and a market capitalization nearing $1.9 billion. This surge followed a Bloomberg report indicating that the SEC might release an “innovation exemption” for tokenized stocks as early as this week. The framework would reportedly establish a pathway for digital securities to trade outside traditional exchange venues and on decentralized crypto platforms, potentially including tokens that may not have the consent or backing of the public companies whose shares they represent.

Factors Driving ONDO’s Gains

For crypto markets, the report aligned with one of the year’s strongest narratives: tokenized public equities. The Kobeissi Letter described the potential exemption via X as a “surprise move,” suggesting it could “reshape the landscape of the American stock market” and represent “one of the US’ biggest shifts into crypto infrastructure yet.” The market’s response focused on projects already involved in on-chain securities. ONDO led gains among major RWA-linked tokens, while traders also identified Hyperliquid as a potential beneficiary due to its role in on-chain derivatives. The DeFi Investor framed the report as “great news” for both HYPE and ONDO, arguing that it “legitimizes Ondo as the largest tokenized stocks issuer,” while Hyperliquid will be “one of the biggest beneficiaries as the largest DEX for RWA perps.”

Ondo’s own data points have given traders a concrete reason to connect the SEC report to the token. Ondo Global Markets recently surpassed $1 billion in total value locked less than eight months after its September 2025 launch. The platform holds over 70% of the tokenized equity issuer market and has processed more than $18 billion in cumulative trading volume. It currently offers over 260 tokenized U.S. stocks and ETFs across Solana, Ethereum, and BNB Chain.

Future Outlook

Katie Wheeler, Managing Director of Global Partnerships at Ondo Finance, stated in a recent interview that the platform’s growth could accelerate further. “I wouldn’t be surprised if we surpassed $5 billion by the end of the year. I know that seems a little advantageous, but we have a lot of interest and we’re really building up quite a pipeline.” Wheeler emphasized that tokenized equities are still in their early stages relative to the size of public markets. “We are literally just scratching the surface. This is a very large industry. So even if we did 1%, I think that would be tremendous,” she said.

Regulatory Considerations

The reported SEC approach raises a key regulatory question: whether stock-linked tokens can scale without compromising shareholder protections. Bloomberg reported that the tokens may not offer traditional rights such as voting power or dividends, while the source material indicates platforms could lose eligibility if listed products fail to provide rights such as voting or dividends. At press time, ONDO traded at $0.3871.

SEC Prepares to Ease Regulations for Tokenized Stocks

The U.S. Securities and Exchange Commission (SEC) is reportedly preparing an “innovation exemption” that could allow trading platforms to offer digital versions of publicly traded stocks under a less stringent regulatory framework. According to Bloomberg Law, the proposal could be unveiled as early as mid-May.

Framework Details

Bloomberg Law reports that the SEC’s framework would enable platforms to trade blockchain-based versions of equities around the clock with faster settlement times compared to traditional shares. The agency has already approved Nasdaq’s proposal to trade tokenized stocks in March, which includes Russell 1000 components and benchmark ETFs. A similar proposal from the New York Stock Exchange (NYSE) was also approved in April.

Institutional Momentum

The Depository Trust & Clearing Corporation (DTCC), which handles the majority of U.S. securities, has announced limited production trades of tokenized assets starting in July, with a broader rollout planned for October. SEC Chair Paul Atkins has expressed support for formal rulemaking regarding on-chain trading systems and blockchain settlement infrastructure, framing it as part of a broader “Project Crypto” initiative.

Market Shift

The combined efforts of institutions like DTCC, Nasdaq, NYSE, and Intercontinental Exchange (ICE) suggest a significant shift in how the $126 trillion global equity market settles and trades. This regulatory clarity validates compliant on-chain infrastructure while potentially impacting offshore synthetic structures. The beneficiaries of this shift are expected to be settlement rails, smart contract platforms, and Layer 2 networks capable of handling high-frequency, low-latency financial transactions at an institutional scale.

Infrastructure Tokens

Crypto-native infrastructure tokens with high throughput, such as sub-second finality, programmable settlement, and deep liquidity, are likely to benefit from the on-chain trading of equities.

Regulatory Tailwinds

The Senate’s advancing crypto market structure bill further supports this regulatory trend. Compliant infrastructure platforms could experience significant growth as institutional volume moves on-chain through the second half of 2025. While gains may be gradual, the data suggests a focus on infrastructure rather than specific synthetic equity tokens. Tokens like Chainlink and Ondo could also benefit.

Bitcoin Hyper

Early-stage infrastructure presales offer a different investment opportunity. Bitcoin Hyper ($HYPER) is currently raising funds at $0.0136 per token, with over $32 million already committed. Hyper is the first Bitcoin Layer 2 with Solana Virtual Machine (SVM) integration, aiming for performance exceeding Solana’s. It offers features like low-latency Layer 2 processing, SVM-based smart contract execution, and a Decentralized Canonical Bridge for Bitcoin transfers. Staking is now live with a 35% APY reward.

The U.S. Securities and Exchange Commission (SEC) is poised to introduce an “innovation exemption” for tokenized stocks, potentially clearing the path for trading digital versions of securities, Bloomberg reported on Tuesday.

Framework Expected This Week

The agency’s framework for tokenized stock trading, developed under the Trump administration, is expected to be finalized this week, according to anonymous sources cited by the outlet. These tokenized assets could be traded on decentralized crypto platforms, a move that could “reshape the landscape of the American stock market,” the report stated.

SEC Support for Tokenization

The SEC, under Chair Paul Atkins, has signaled its support for tokenization since mid-2025, including exemptions designed to accelerate on-chain securities trading. This aligns with broader U.S. policy aimed at leading in digital assets.

Trading Without Company Consent

The SEC is considering allowing the trading of tokens that do not have the backing or consent of the public companies whose shares they represent, Reuters reported. These tokens may not offer traditional shareholder rights, such as voting power or dividends, the report added.

Potential Impact on Crypto Infrastructure

This move could represent a significant shift into crypto infrastructure, enabling 24/7 trading of digital securities, potential DeFi integration for equities, and growth in platforms handling tokenized assets.

Bullish Outlook

DeFi analyst Ignas noted that the development is bullish for various assets, including ONDO, CFG, PENDLE, and HYPE, as well as lending markets that accept tokenized collateral, such as AAVE, MORPHO, and FLUID. Tokenization is transitioning from planning to policy, marking a structural shift that will facilitate round-the-clock trading and decentralized infrastructure.

Global Race to Tokenize

“We’ve entered a global race to tokenize money and capital markets,” commented Token Terminal. “The economic advantages of asset tokenization are too good to ignore, which is why we believe that all other major nations and economic zones will try to follow the US playbook when it comes to stablecoins and asset tokenization.”

Tokenized Assets Market Share

Tokenized stocks currently represent a small portion of the broader tokenized real-world asset market, with $1.45 billion, or 4.3% of the distributed total value locked (TVL), according to RWA.xyz. Tokenized U.S. Treasuries account for the largest share, at 46% of $15.5 billion. Ethereum is the dominant blockchain, with a market share exceeding 60% (including layer-2s) of all tokenized real-world assets.

With the US Digital Asset CLARITY Act nearing potential enactment, investors and proponents are closely watching its potential impact on XRP. A cryptocurrency analyst has analyzed specific sections of the bill that could directly affect XRP, Ripple, and its stablecoin, RLUSD. These key provisions address XRP’s classification as a commodity, its role in banking infrastructure, and potential yield opportunities for investors.

The CLARITY Act’s Implications for XRP

In a recent post on X, the pseudonymous crypto analyst @Whiplash437 outlined the specific sections of the CLARITY Act with the most significant potential impact on XRP. He began with Section 105, which defines digital assets and supports classifying blockchain-based cryptocurrencies as commodities.

According to the analyst, this section is crucial because it could shift cryptocurrencies from the regulatory purview of the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). @Whiplash437 noted that Section 105 could provide legal protection for XRP by codifying Judge Analisa Torres’ earlier ruling that XRP’s secondary market sales are not securities into permanent federal law.

He then discussed Section 110, which mandates that digital commodity exchanges, dealers, and brokers register for Anti-Money Laundering (AML) purposes and comply with the Bank Secrecy Act (BSA). This section also introduces the concept of “mature blockchains,” a classification that would fall under CFTC oversight. @Whiplash437 described this part of the bill as a test, noting that the XRP Ledger (XRPL) has already met the mature blockchain criteria. He highlighted the blockchain’s growth, citing 13 years of uninterrupted operation, over 90 million transactions executed, and globally distributed decentralized validators. The analyst also stated that this section would officially classify XRP as a digital commodity under the CFTC.

The Bill’s Potential Impact on Ripple and RLUSD

Beyond XRP, @Whiplash437 also highlighted sections of the CLARITY Act that could benefit Ripple and RLUSD upon the bill’s passage. He pointed to Section 401, which focuses on how financial institutions handle digital assets.

Under this section, the analyst stated that US banks, credit unions, and financial holding companies would be permitted to use digital assets for payments, custody, clearing, and settlement. He also noted that this part of the bill would effectively open the entire American banking sector to Ripple’s infrastructure and the XRP Ledger.

Finally, @Whiplash437 also addressed Section 404, which prohibits yield payments on simply holding stablecoins. The analyst stated that despite this restriction, the bill still allows crypto users to earn activity-based rewards through staking, governance, and loyalty programs. He believes this policy will play a key role in shaping how RLUSD is offered across US markets.

The Financial Conduct Authority (FCA) and the Bank of England unveiled a “shared vision” for tokenization in UK wholesale financial markets on Monday, initiating a joint Call for Input to provide firms with greater regulatory and infrastructure certainty as distributed ledger technology transitions from pilot projects to full-scale implementation.

Regulatory Clarity Sought

In a statement, the regulators indicated they would clarify their approach in areas where firms seek greater clarity, including prudential treatment, tokenized collateral, and settlement instruments.

Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, encouraged both the private and public sectors to build upon the “strong foundations” established by the Bank and the FCA as the crypto industry advances “from pilots to production to support financial stability and sustainable growth.”

Simon Walls, the FCA’s Executive Director of Markets, stated that tokenization has the potential to “transform wholesale markets – reshaping how assets are issued, traded, and settled.”

Bank of England Initiatives

The central bank also confirmed plans to launch a live synchronization service targeted for 2028, to consult on extending RTGS and CHAPS settlement hours towards near 24/7 operation, and to support HM Treasury’s pilot issuance of a digital gilt instrument known as DIGIT.

Industry Response

Katie Harries, Head of Policy for Europe at Coinbase, welcomed the announcement as a “clear vision for tokenization in financial markets,” urging the BoE and FCA to embrace DeFi as an opportunity to “deliver meaningful benefits for its citizens by taking an ambitious, forward-looking approach to tokenisation.”

Ongoing Collaboration and Guidance

The Bank and the regulator noted that they continue to collaborate with 16 firms on the live issuance and settlement of tokenized assets through the Digital Securities Sandbox. The Prudential Regulation Authority has also published Dear CEO letters updating guidance on the prudential treatment of tokenized assets, stablecoins, and other cryptoasset exposures.

Broader Context

The announcement follows recent indications that the Bank of England may be considering concessions to the digital asset industry. Breeden told the Financial Times that the Bank was reviewing whether its proposed stablecoin reserve floor and retail holding caps had been “overly conservative” following industry feedback.

Breeden’s remarks followed a statement by Sasha Mills, the Bank of England’s financial market infrastructure director, at the FT Digital Asset Summit, where she stated that the Bank of England was treating stablecoins as a “new form of money” and confirmed that it expected to accept applications from prospective systemic issuers by the end of the year.

Ripple CTO Supports Senate Bid with XRP Donation

In the latest development in the XRP community, Ripple’s Chief Technology Officer, David Schwartz, has made a personal financial contribution in XRP to John Deaton’s Senate campaign. This move publicly confirms Schwartz’s support for the pro-crypto lawyer, who gained national prominence for defending XRP holders during the SEC v. Ripple lawsuit.

The donation positions Schwartz as one of the most senior crypto executives to directly back Deaton’s political bid using the very asset at the center of that regulatory fight.

The contribution is a bullish signal for crypto-aligned political momentum. When a principal architect of the XRP Ledger supports a Senate candidate with his own tokens, the symbolic weight amplifies the financial one.

Donation Details and Significance

Schwartz’s contribution is a personal donation, distinct from a disbursement from a corporate super PAC. Ripple, the company, has already pledged $25 million to the pro-crypto super PAC Fairshake, which operates independently of any candidate campaign and can raise and spend unlimited funds.

A personal contribution to a federal campaign is subject to FEC individual donor limits and must be reported by the campaign. The value is recorded in USD at the time of receipt, meaning the XRP is converted to a dollar figure on the books, even if received as a digital asset.

This compliance structure is significant. Schwartz is not routing money through an intermediary. He is directly associating his name, title, and preferred asset with Deaton’s campaign in the public record. For the XRP community, which closely followed the SEC litigation, this personal identification carries more weight than a line item in a PAC disclosure.

Political Context and Implications

Deaton’s campaign has emphasized small-donor and community-driven optics, contrasting with industry-heavy PAC infrastructure. Schwartz’s XRP donation aligns with both narratives: it is personal and community-focused, while also coming from a figure whose technical decisions shape a multi-billion dollar asset class. This combination is difficult to dismiss as either grassroots noise or pure corporate influence.

The political target is Senator Elizabeth Warren of Massachusetts, a vocal critic of the crypto industry and a key figure in what supporters of the sector have labeled the “anti-crypto army” in the Senate.

Warren’s regulatory pressure has been a direct factor in the broader legislative battles over digital asset frameworks currently moving through Congress. A competitive Senate race in Massachusetts puts that pressure point on the electoral map.