The U.S. Securities and Exchange Commission (SEC) is exploring a regulatory framework that could eventually allow approved platforms to offer 24/7 trading of tokenized U.S. stocks.
The initiative centers on a proposed “innovation exemption,” which could give qualified companies limited regulatory relief while they test blockchain-based securities trading under SEC supervision.
If implemented, the framework could represent a major shift in how U.S. equities are traded. Instead of being largely tied to traditional exchange hours, eligible tokenized stocks could potentially trade overnight, on weekends, and even during public holidays.
However, the proposal remains under development. Existing U.S. securities laws still apply, and the SEC has not announced a final launch date or detailed eligibility requirements.
SEC Explores an Innovation Exemption for Tokenized Securities
The SEC is considering using its exemptive authority to allow selected companies to experiment with tokenized securities while regulators work toward more permanent rules.
SEC Chair Paul Atkins has supported efforts to bring more financial-market activity onto blockchain networks while keeping tokenized securities within the existing federal regulatory system.
The concept would not simply remove regulations for blockchain-based stocks. Instead, approved platforms could receive limited exemptions from specific requirements while operating within clearly defined conditions.
SEC Commissioner Hester Peirce previously said agency staff was working on an exemption designed to facilitate limited trading of certain tokenized securities.
The approach appears narrower than a broad industry-wide exemption and would allow regulators to observe how blockchain-based securities markets operate before introducing permanent rules.
Could Tokenized Stocks Really Trade 24/7?
One of the biggest potential changes involves trading hours.
Traditional U.S. stock exchanges generally operate from 9:30 a.m. to 4:00 p.m. Eastern Time on business days, although extended-hours trading is already available through certain brokers and venues.
Blockchain networks, by contrast, can operate continuously.
That means a regulated tokenized stock platform could technically process transactions 24 hours a day, seven days a week.
Investors could potentially buy or sell eligible tokenized shares late at night, during weekends, or on holidays when traditional exchanges are closed.
The SEC would still have several important questions to resolve before such a system could operate at scale.
These include how brokers would meet best-execution requirements, how prices would be determined when traditional exchanges are closed, and how orders would move between blockchain and conventional markets.
Not Every Tokenized Stock Would Be the Same
Another major issue is determining what investors actually own when they purchase a tokenized stock.
An issuer-backed token could represent ownership in the same underlying security using blockchain technology as part of the ownership and settlement infrastructure.
A third-party token, however, could operate differently. It might simply track the value of a company’s shares or provide investors with a contractual claim against the platform issuing the token.
That distinction could significantly affect investor rights.
Depending on the structure, holders may not automatically receive the same voting rights, dividend rights, or direct ownership protections available to traditional registered shareholders.
Industry groups have therefore called on regulators to clearly distinguish between genuine issuer-backed tokenized securities and third-party products that merely provide exposure to stock prices.
Tokenized Stocks Would Still Be Securities
Moving shares onto a blockchain does not automatically remove them from U.S. securities law.
The SEC’s position is that the economic substance of an asset matters more than whether it is represented using a blockchain token.
A token representing shares in a publicly traded company would therefore generally remain subject to federal securities regulations.
Depending on how the system is structured, companies involved in tokenized stock markets could face rules covering areas such as broker-dealer registration, alternative trading systems, exchanges, transfer-agent records, clearing, settlement, and custody.
This means tokenization could change the technology used to trade and settle securities without eliminating the regulatory obligations attached to those securities.
Custody Remains a Major Challenge
Custody is likely to become one of the most important issues in developing regulated tokenized stock markets.
If a company holds traditional shares and then issues blockchain tokens representing those shares, investors need confidence that every token is properly backed.
Regulators must also determine what happens if the company issuing or holding the assets fails.
For example, investors would need a clear process for proving ownership and recovering underlying securities if a token issuer or custodian became insolvent.
Blockchain records could make certain transactions easier to track, but they do not automatically solve the legal questions surrounding ownership and investor protection.
SEC Must Address Market Surveillance
Round-the-clock markets also create new challenges for market surveillance.
Traditional exchanges already operate systems designed to detect suspicious trading, manipulation, and other potentially abusive behavior.
Tokenized securities platforms would need similar protections.
The SEC may have to determine how participating platforms share trading information, detect manipulation, and monitor activity taking place while traditional U.S. exchanges are closed.
Another challenge involves connecting blockchain settlement systems with existing market infrastructure, including the Depository Trust Company and other organizations responsible for custody and post-trade processing.
DTCC Has Already Started Tokenization Tests
Tokenized securities are not purely theoretical.
Parts of the U.S. financial system have already received limited regulatory permission to test blockchain-based securities infrastructure.
In December 2025, SEC staff issued a no-action letter allowing the Depository Trust Company to operate a tokenization service for three years under specific conditions.
The eligible assets include certain Russell 1000 stocks, major index ETFs, and U.S. Treasury securities.
A no-action letter does not create a permanent regulation for the entire industry. Instead, it generally indicates that SEC staff does not intend to recommend enforcement action based on the specific circumstances presented.
DTCC’s tokenization efforts have attracted more than 100 members and partners, bringing together traditional financial institutions and blockchain companies.
The projects are examining areas including tokenized equities, Treasuries, securities lending, collateral management, and margin processes.
Nasdaq Is Testing Tokenized Equities
Nasdaq has also entered the tokenized securities market.
In March 2026, the SEC approved a Nasdaq pilot that allows selected market participants to trade certain tokenized equities alongside their traditional counterparts.
An important feature of the Nasdaq model is that the tokenized and conventional versions are designed to provide the same economic and shareholder rights.
The pilot includes eligible Russell 1000 securities and major index-linked ETFs.
Instead of creating separate tokens that merely follow stock prices, the approach keeps tokenized securities within the established U.S. national market structure.
The New York Stock Exchange has also submitted proposed rule changes related to tokenized securities, giving regulators additional models to evaluate.
Regulation NMS Changes Could Help Blockchain Trading Platforms
The SEC is simultaneously considering changes to Regulation NMS, which governs important parts of how U.S. equity orders move between trading venues.
Among the proposals are possible changes involving Rule 611 and Rule 610(e).
Rule 611 generally requires trading centers to prevent trades from being executed at prices worse than certain protected quotations available elsewhere.
Some blockchain companies argue that existing requirements were primarily designed around traditional continuous order-book markets and may make it harder for alternative trading systems to compete.
Ondo Finance has supported removing certain provisions, arguing that the changes could provide more flexibility for blockchain-based markets, auction systems, and other alternative trading models.
However, these proposals remain part of the regulatory process and should not be interpreted as final approval for unrestricted blockchain stock trading.
What 24/7 Tokenized Stock Trading Could Mean for Investors
If the SEC ultimately creates a workable regulatory framework, tokenized stocks could significantly change the experience of investing in U.S. equities.
Continuous markets could allow investors in different time zones to trade without waiting for Wall Street’s traditional opening bell.
Blockchain settlement could also potentially improve transaction efficiency and make financial infrastructure more programmable.
But 24/7 markets could introduce new risks.
Liquidity may be significantly lower during overnight or weekend sessions, potentially creating wider spreads and greater price volatility. Investors would also need to understand exactly what rights their tokens provide and who is responsible for custody of the underlying assets.
These concerns explain why the SEC appears to be considering a controlled testing environment rather than immediately allowing unrestricted tokenized stock trading.
The SEC Has Not Approved Universal 24/7 Stock Trading
Despite growing momentum around asset tokenization, investors should not interpret the SEC’s work as approval for every U.S. stock to trade around the clock.
The proposed innovation exemption has not yet taken effect, and no final framework or implementation date has been announced.
Any participating platform would likely need to meet regulatory requirements covering areas such as investor protection, disclosures, custody, market surveillance, execution quality, settlement, and ownership records.
The development nevertheless shows that tokenized securities are moving closer to the traditional financial system.
With DTCC testing blockchain settlement, Nasdaq experimenting with tokenized equities, NYSE proposing related changes, and the SEC considering regulatory exemptions, blockchain-based stock trading is increasingly becoming part of mainstream U.S. market policy discussions.
If regulators can balance technological innovation with investor protection, 24/7 tokenized stock trading could eventually become an important part of the U.S. financial market infrastructure.
