SEC Pushes Plan to Make Stocks Trade Like Crypto on Blockchain

Core Viewpoint - The U.S. SEC is developing a plan to allow stocks to trade on the blockchain, treating them as digital tokens similar to cryptocurrencies, which has garnered support from crypto exchanges and fintech platforms but faces resistance from traditional financial institutions [1][4]. Group 1: SEC's Initiative - The SEC is consulting with market participants on regulatory changes to enable tokenized securities [2]. - Nasdaq has filed a rule change to allow listed equities and ETPs to trade in tokenized form, with the public-comment period ending on October 14 [3]. - SEC Commissioner Hester Peirce has expressed readiness to collaborate with firms seeking to tokenize traditional assets [4]. Group 2: Industry Response - Large financial institutions, including Citadel Securities with over $95 billion in AUM, argue that tokenization threatens their roles in trading and settlement [5]. - The World Federation of Exchanges (WFE) has called for tighter oversight on tokenized stocks, expressing concerns that these products mimic equities without providing shareholder rights or market safeguards [5][6]. Group 3: Regulatory Perspective - Hester Peirce emphasized that tokenized securities must still comply with existing securities regulations, asserting that blockchain technology does not change the nature of the underlying asset [7].