The US crypto industry may have to wait longer for tokenized stocks. The US Securities and Exchange Commission (SEC) has reportedly delayed plans for an “innovation exemption” that would allow blockchain-based versions of US equities to trade on crypto platforms.

The proposal could have opened the door for tokenized shares of companies like Apple and Tesla. But pushback from traditional market participants slowed the process.

What Were Tokenized Stocks Supposed to Do?

The framework aimed to let crypto firms and DeFi platforms offer stock tokens with features such as:

  • 24/7 trading
  • Faster settlement
  • Fractional ownership
  • On-chain transfers

The assets would still be treated as securities. Supporters argue tokenization could modernize markets and improve access for retail investors.

Wall Street Worries About Market Fragmentation

The main concern is liquidity. Traditional exchanges fear that separate crypto markets could split trading activity away from stock exchanges.

Critics also raised questions about:

  • Price discovery
  • Market efficiency
  • Investor protections
  • Voting rights and dividends

Some tokenized products may represent shares without giving holders the full rights of traditional stock ownership. That creates a more complicated structure than simply buying shares through an exchange.

Tokenization Is Still Growing Fast

Despite the delay, the broader market continues expanding. Tokenized real-world assets have reportedly grown to more than $34 billion, rising around 1,600% in two years.

Tokenized equities alone have already passed $1 billion in market value. Major activity remains concentrated on: Ethereum, Solana

Institutional interest is also increasing through products like BlackRock’s BUIDL fund.

The delay shows the challenge regulators now face. Crypto markets want:

Speed + access + continuous trading

Traditional markets want: Liquidity + protections + stability

Tokenized stocks sit directly between those two worlds. The SEC has not announced a new timeline, but the proposal remains under review. For now, tokenized equities are still moving forward. Just not as quickly as the market expected.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.