Wall Street on the Blockchain: SEC Pushes Tokenized Stocks According to New Report

A completely tokenized stock market is closer than ever. According to a recent report from The Information, the U.S. Securities and Exchange Commission (SEC) is on the move to allow Wall Street to offer its company shares on the blockchain. 

The move would completely revolutionize the stock market as we know it. Once on the blockchain, shares could be traded 24/7 and settled instantly without the need for intermediaries like clearinghouses or custodians.

Under this plan, companies would be able to offer their shares on cryptocurrency exchanges. Each ‘token’ would represent a share of company stock, allowing investors to buy, sell, and hold equity in a fully digital format.

This year appears to be the pivotal year where tokenization really gets widespread adoption. Companies like Forward Industries are already experimenting with tokenized stocks, and the trend appears to be only getting bigger. 

The most recent SEC push toward tokenized stock comes only a few days after the U.S. Government began releasing some of its economic data on the blockchain. Last Thursday, the U.S. Department of Commerce added six key indicators from the Bureau of Economic Analysis on-chain, in a partnership with Chainlink and Pyth Network. 

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Moreover, the growing trend of tokenization can have a significant impact on the cryptocurrency market. Developments like Wall Street’s arrival on the blockchain are expected to result in a large increase in on-chain activity, boosting demand for infrastructure like Ethereum, Solana, and Layer 2 networks. It would also allow for tokenized assets to integrate with DeFi protocols, paving the way for the lending, borrowing, and collateralization of stocks.

Trading tokenized stocks also requires real-time pricing and settlement, which could also boost the demand for the stablecoin market as trading pairs, as well as oracle networks like Chainlink and Pyth. 

The SEC is yet to issue a formal statement on the matter, but recent actions related to the Commission imply that it could, in fact, be in favor of tokenized stocks.