SEC Delays Plan to Permit Trading in Tokenized Stocks
Summary
- The U.S. SEC said it had decided to delay plans to allow trading in tokenized stocks because of market concerns and pushback.
- The decision has raised the prospect that expansion of the U.S. tokenized securities market could proceed more slowly than expected.
- Even so, Wall Street and the digital asset (cryptocurrency) industry continue to pursue related businesses, viewing the long-term growth potential of the tokenized asset market as strong.
Forecast Trend Report by Period
The U.S. Securities and Exchange Commission has decided to delay a plan to permit trading in tokenized stocks, with regulatory uncertainty and investor-protection concerns seen as key factors behind the move.
Bloomberg reported on May 22 that the SEC decided to hold off on the plan after taking market concerns and pushback into account.
Tokenized stocks are structures in which real shares are issued and traded as blockchain-based digital tokens. The industry has touted them as a way to improve trading efficiency and expand access. At the same time, concerns have persisted over investor protection and market stability.
Regulators are also reviewing possible conflicts with the existing securities framework, liquidity management and the protection of investor rights. Some market participants have warned that allowing trading before the rules are fully in place could trigger market disruption.
The decision has raised the prospect that growth in the U.S. tokenized-securities market could proceed more slowly than expected. Even so, Wall Street and the digital-asset industry continue to pursue related businesses, viewing the long-term growth potential of the tokenized-asset market as strong.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.