SEC Signals Tokenization Exemption Could Arrive Within Weeks
- Paul Atkins said White House review could clear the path for a near-term SEC rollout.
- The exemption could let firms test tokenized securities before full registration.
- Major exchanges and lawmakers currently signal broader support for tokenized markets.
SEC Chair Paul Atkins said a tokenization innovation exemption could arrive within weeks, opening a temporary path for crypto firms to issue and trade tokenized securities. In a recent interview, he said the proposal is under White House review and could arrive soon. He also said the SEC is building a framework that would give qualifying firms limited relief from registration and compliance rules.
Sandbox Plan Moves Closer
Atkins outlined the timeline during a public address on crypto asset regulation. He said the SEC is actively working on a framework for tokenized securities. The agency plans to seek public comment on related issues tied to future rulemaking.
The proposal includes what the text describes as a token safe harbor. That framework would let startups raise up to $5 million over four years with disclosures. It also allows annual fundraising up to $75 million and offers relief once issuers step back from management.
Could that window become the first live U.S. sandbox for tokenized securities? According to Tekedia, the exemption would cover broker-dealers, exchanges, and token issuers. That would let firms test tokenized equities and other assets without first completing full SEC registration.
The text says the main beneficiaries would be firms building infrastructure for tokenized real-world assets. That includes equity tokens, tokenized bonds, and fund shares. It also points to Franklin Templeton, which recently launched tokenized ETFs abroad for access through crypto wallets.
The Block reported that current SEC rules treat tokenized securities like traditional securities. As a result, firms must follow the same registration path as broker-dealers. That process can take months or years before a product reaches the market.
Capitol Hill and Market Pressure
At the same time, pressure for clearer rules has grown in Washington. On Wednesday, the House Financial Services Committee held a hearing titled “Tokenization and the Future of Securities: Modernizing Our Capital Markets.” The March 25 session focused on how securities regulation should adapt to on-chain finance.
During that hearing, Rep. Andy Barr said tokenization had already arrived. “No doubt tokenization of securities is coming,” Barr said. He added that the United States must modernize regulation while preserving investor protection and leadership.
The text also says the SEC has already allowed several limited steps toward tokenized securities. Even so, the agency still treats those assets as securities under existing law. In December, it authorized DTCC to tokenize certain highly liquid assets on pre-approved blockchains for three years.
Later, the New York Stock Exchange said it was developing a platform for trading and onchain settlement of tokenized securities. More recently, the SEC approved a rule change that would let Nasdaq support tokenized shares. Those moves point to growing institutional interest in around-the-clock markets.
Related: Fidelity Urges SEC to Clarify Crypto Broker-Dealer Rules
Broader Debate Takes Shape
Still, some lawmakers do not support the exemption without wider legislation. The text says Rep. Brad Sherman raised concerns about the plan and the lack of a legislative route. That resistance adds another layer to the debate as the SEC moves ahead.
Yahoo Finance reported that lawmakers are also weighing broader tokenization legislation. That effort would work alongside the SEC’s exemption plan. In turn, the agency’s proposal may serve as an early regulatory bridge while Congress weighs a larger framework.
No direct market reaction appeared at press time. Even so, the text says Bitcoin traders have adjusted positions around major U.S. policy announcements this month. Token markets across several sectors also remain near recent highs.
Atkins, who was confirmed as chair in April 2025, has repeatedly called for innovation-friendly regulation. The text says he views tokenization as a way to modernize markets through faster settlement and greater transparency. His “within weeks” timeline suggests the exemption could arrive before mid-April 2026.
