US Securities and Exchange Commission (SEC) Commissioner Hester Peirce said the regulator is exploring an "innovation exemption" that would allow limited trading of tokenized securities, as traditional exchanges and crypto firms expand efforts to build blockchain-based financial markets.
SEC Explores 'Innovation Exemption' to Fast-Track Tokenized Securities
13 March 2026 - 14:20 CET
By Matt Neill
Speaking at an advisory committee discussion on 12 Mar, Peirce said SEC staff are working on a narrowly tailored framework designed to allow firms to experiment with tokenized assets while maintaining investor protections. The proposal comes as exchanges including Nasdaq, Intercontinental Exchange and crypto platform Kraken move to deploy tokenized market infrastructure, highlighting growing momentum behind blockchain-based versions of traditional securities.
Regulatory sandbox for tokenized assets
Peirce said the SEC is evaluating a limited exemption that would enable trading of certain tokenized securities under controlled conditions. "As Chairman Atkins and I discussed recently, Commission staff is working on an innovation exemption to facilitate limited trading of certain tokenized securities," she said.
The initiative is intended to create space for experimentation while regulators assess how existing securities laws apply to blockchain-based financial instruments. Peirce asked the committee to examine several key questions, including whether existing disclosure requirements are sufficient for tokenized securities and whether new rules should apply to broker-dealers or clearing agencies that tokenize security entitlements.
She also asked whether faster blockchain-based settlement would require exemptions from current T+1 settlement rules. "The draft states that allowing for the atomic settlement of tokenized equity securities requires exemptive relief or reforms to the SEC's existing T+1 settlement rules," Peirce said, requesting clarification on why such relief would be necessary for transactions that settle faster than traditional markets.
Exchanges move into tokenized markets
The regulatory discussions come as both traditional exchanges and crypto platforms accelerate efforts to develop tokenized versions of financial assets. Nasdaq recently announced a partnership with crypto exchange Kraken to develop infrastructure for tokenized equities through the xStocks framework, which aims to allow assets to move between traditional capital markets and blockchain networks while preserving shareholder rights.
Intercontinental Exchange, the parent company of the New York Stock Exchange, has also taken a minority stake in crypto platform OKX as part of a strategy to integrate digital-asset markets with regulated exchange infrastructure.
At the same time, US regulators are debating how oversight of digital assets should be structured. Policymakers have discussed closer coordination between the SEC and the Commodity Futures Trading Commission (CFTC), with some proposals suggesting the agencies could share or consolidate responsibilities for digital-asset regulation. Peirce's proposal for an innovation exemption reflects the broader challenge regulators face as financial markets begin to incorporate blockchain-based infrastructure.
