The SEC has opened a five-year pathway for tokenized U.S. stocks that requires each approved token to carry the economic, voting, dividend, and liquidation rights attached to the underlying share.

Bitget Wallet COO Alvin Kan told crypto.news that the legal rights attached to a stock token will matter more to investors than its trading hours, settlement speed, or country of issuance.

“A token that tracks a stock price is not the same thing as owning the stock. Putting both on a blockchain doesn’t erase that difference,” Kan said.

Under the SEC exemption, a tokenized National Market System stock must grant its holder the same rights and privileges as the matching traditional share. Kan said those protections include an economic interest in the company, dividends, voting power and rights during liquidation.

Synthetic exposure does not qualify under the exemption. An issuer can also object if an unrelated third party tries to tokenize its shares, giving listed companies some control over how their securities appear in blockchain-based markets.

Investor rights separate tokenized stocks from price trackers

Instead of dividing the market into U.S. and offshore products, Kan said investors should examine what each token represents under the law. Two products can track the same listed company while giving their holders very different claims.

One token may represent a direct or beneficial interest in shares held through a regulated structure. Another may function as a contract with an intermediary that promises to follow the stock’s price without making the buyer a shareholder.

The difference can determine whether a holder receives dividends, can vote on company matters or has a claim on assets if the issuer is liquidated. Counterparty exposure may also enter the arrangement when the investor’s claim depends on a platform, custodian or special-purpose entity.

A Sep. 11 examination of tokenized ownership structures found that products can represent direct shares, custodial claims or synthetic contracts. Company rules, securities laws and underwriter restrictions may still limit transfers even when a token moves freely between blockchain addresses.

Kan said many crypto-native products outside the United States provide price exposure or a contractual claim against an intermediary. Under the SEC pathway, an approved NMS stock token must instead preserve the rights carried by the conventional security.

Coinbase CEO Brian Armstrong made a similar distinction on Sep. 14 when he said the exchange’s stock tokens use real securities rather than synthetic assets or debt instruments. Coinbase holds the underlying shares through an offshore special-purpose company and a regulated U.S. broker, according to a report on its fully backed stock tokens.

Verified holders can request redemption of the underlying shares, while dividend proceeds are generally reinvested after taxes and fees. Coinbase’s products, however, remain unavailable to U.S. persons and are not registered under the U.S. Securities Act.

Tokenized stocks can improve access without changing ownership

For eligible users, Kan identified self-custody, fractional ownership, continuous trading and almost immediate settlement as possible benefits. The SEC has also listed such features among the potential gains from moving securities onto blockchain systems.

Trading a stock token around the clock could reduce the limits imposed by regular exchange hours, while fractional units could let investors purchase smaller portions of high-priced shares. Blockchain settlement may also shorten the time between a completed trade and the final transfer of ownership.

Yet Kan cautioned that tokenization alone does not produce a better investment product. A system may use blockchain records while keeping strict permission controls, thin liquidity and several intermediaries between the investor and the underlying share.

“If access remains heavily permissioned, liquidity is shallow and users still face multiple intermediaries, blockchain may mainly modernize the back end without materially changing the front-end experience,” Kan said.

For investors, the practical test is whether the structure reduces the work involved in settlement, record reconciliation and product distribution. Moving a stock record onto a blockchain without removing those costs would change the technology supporting the market but leave the customer experience largely intact.

The ownership record forms another part of the issue. On Sep. 1, the SEC proposed updates to federal transfer-agent rules and forms, which have not received a substantial revision since the late 1970s and early 1980s, according to the agency.

A recent report on blockchain ownership records explained that transfer agents could use distributed-ledger systems as an official record under the proposal. The rule would not automatically turn every stock-linked token into a legal share or give its holder shareholder rights.

The SEC exemption gives institutions room to test products

For banks, brokerages, trading venues and blockchain providers, Kan described the exemption as operational clarity rather than permanent legal certainty.

The order expires five years after publication. It also contains limits covering trading symbols and volume, remains subject to modification and is designed to provide information for later SEC rulemaking.

Those terms give institutions enough regulatory space to develop pilot programs, connect existing systems and test modular infrastructure, Kan said. Firms committing capital over longer periods will still distinguish between a temporary exemptive order and requirements placed in final agency rules or federal law.

The distinction matters for U.S. investors because the SEC is using its authority over securities already covered by the Exchange Act. The agency does not have to wait for Congress to settle every dispute over the classification of crypto assets before testing blockchain systems for instruments that are already treated as securities.

Kan said the approach separates statutory reform from agency-led changes to market structure. Congress can write laws covering the treatment of digital assets across several markets, while the SEC can act within its existing securities mandate.

Congress has left the SEC to use its existing authority

The exemption arrived two days after the Senate failed to advance the Digital Asset Market Clarity Act, or CLARITY Act, during a Sep. 15 procedural vote.

The bill sought to establish a federal market structure for digital assets and divide regulatory responsibilities between the SEC and the Commodity Futures Trading Commission. Its failure did not remove the SEC’s authority over products already classified as securities.

A 50-49 Senate vote left the bill 10 votes short of the 60 required to invoke cloture and open formal debate. Clearing the motion would not have passed the legislation; it would only have allowed senators to begin considering the House-approved measure and possible amendments.

All participating Democrats opposed cloture. Republican Sens. Susan Collins, Josh Hawley, Jerry Moran, and Thom Tillis also voted against the motion, with Tillis changing his vote for procedural reasons that preserved the option to request reconsideration.

The US Commodity Futures Trading Commission has submitted a new regulatory action covering crypto asset transactions and markets for White House review, as the agency moves forward with its approach to overseeing the digital asset sector.

According to a filing with the Office of Information and Regulatory Affairs, the action, titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” was received on Sept. 17 and is listed at the “prerule” stage. The designation indicates the action is at an early stage of the rulemaking process and has not yet been formally proposed.

The filing does not disclose details of the planned regulation, but comes days after the Senate failed to advance the CLARITY Act, legislation aimed at establishing a federal regulatory framework for crypto markets.

Source: Office of Information and Regulatory Affairs

A day after the Sept. 15 vote, CFTC Chair Michael Selig posted on X that the agency was “locked in and ready to ship” rules for crypto markets using its existing statutory authority, while SEC Chair Paul Atkins similarly said the securities regulator would move ahead “with or without legislation.”

Both agencies took action the following day. The CFTC issued a no-action position for providers of passive software, while the SEC announced temporary exemptions for certain platforms facilitating onchain trading of tokenized securities.

Source: SEC

CFTC and SEC move ahead without new legislation

The CFTC had been exploring the possibility of advancing crypto rules without new legislation before the Senate vote this week. In remarks at the CFTC’s Innovation Advisory Committee conference on Aug. 20, Selig said the agency was prepared to use its existing authority to establish a crypto asset market regime if the CLARITY Act stalled.

Selig added that he had directed CFTC staff to explore rules that could allow existing registrants and currently unregistered crypto exchanges to become a type of designated contract market called a “crypto asset market,” where leveraged or margined crypto trading could be offered under CFTC oversight.

Coinbase CEO Brian Armstrong also said he expected regulators to move ahead after the vote. In a Sept. 15 post on X, he wrote that the SEC and CFTC had “the tools they need to create clear rules under existing authority” and that he expected them to begin working on the issue “in earnest.”

“So clarity is coming to crypto regardless,” Armstrong wrote.

Source: Brian Armstrong

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The U.S. Commodity Futures Trading Commission (CFTC) has submitted a new regulatory action covering how it plans to oversee crypto asset transactions and crypto asset markets, with the proposal now moving through the federal rulemaking pipeline for White House review.

According to a filing published through the Office of Information and Regulatory Affairs (OIRA) at reginfo.gov, the action—titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets”—was received on Sept. 17 and is currently listed at the “prerule” stage, meaning it is early in the process and has not yet been formally proposed.

Key takeaways

• The CFTC has initiated a new rulemaking track for crypto-related transactions and markets, but the details have not been released yet.
• OIRA’s “prerule” designation indicates the action is still at an early stage and not a formal notice of proposed rulemaking.
• The move follows the Senate’s failure to advance the CLARITY Act, keeping pressure on regulators to act without new legislation.
• In parallel, both the CFTC and SEC signaled they could proceed using existing authority, including through targeted relief and exemptions.

A CFTC rulemaking filing enters the federal review track

The OIRA entry for the CFTC action provides the clearest public confirmation so far of the agency’s regulatory direction: the filing exists, has been received, and is underway as part of the U.S. government’s rulemaking review process. However, the filing does not outline what specific requirements the CFTC plans to impose or how it intends to define regulated crypto market structures.

For market participants, the practical significance is that rule development is not only being discussed—it is being processed through government channels that typically precede public comments and formal proposals. Still, because the item remains at the prerule stage, the scope, timing, and concrete compliance expectations are not yet available.

After the CLARITY Act setback, regulators show momentum

This CFTC filing comes days after the U.S. Senate failed to advance the CLARITY Act, a bill intended to establish a federal framework for crypto market regulation.

That failure matters because it reduces the likelihood of Congress providing an immediate, comprehensive structure that could harmonize oversight across agencies. With legislation stalled, the burden shifts to regulators to define roles and boundaries through existing statutory authority—an approach the CFTC and SEC appear prepared to pursue.

CFTC and SEC actions signal “rules with or without legislation”

Shortly after the Sept. 15 Senate vote, CFTC Chair Michael Selig posted on X that the agency was “locked in and ready to ship” rules for crypto markets using its existing authority. SEC Chair Paul Atkins made a similar point, saying the SEC would move ahead “with or without legislation.”

The following day, both regulators took visible steps. The CFTC issued a no-action position for providers of passive software. Separately, the SEC announced temporary exemptions for certain platforms facilitating onchain trading of tokenized securities, as reflected in an SEC communication posted on X.

These actions do not replace broad rulemaking, but they do indicate an interim strategy: provide targeted regulatory relief and clarify operational pathways for specific categories of activity while longer-term frameworks are developed.

What the CFTC has said before: using existing authority to define a market regime

The CFTC’s willingness to move ahead without waiting for legislation has been discussed publicly before. Earlier remarks by Chair Selig at the CFTC’s Innovation Advisory Committee conference on Aug. 20 indicated the agency had been assessing whether it could establish a crypto asset market regime under existing authority if the CLARITY Act stalled.

In those remarks, Selig indicated he directed CFTC staff to explore rule options that could enable existing registrants and currently unregistered crypto exchanges to become a type of designated contract market—referred to as a “crypto asset market”—where leveraged or margined crypto trading could fall under CFTC oversight.

This matters for investors and builders because the classification of trading venues and the treatment of leverage and margin can directly affect which firms can operate, which registrations may be required, and what investor protection frameworks are applied. It also helps determine how market participants structure products and routing of orders.

Industry leaders have echoed the expectation that regulators would proceed. Coinbase CEO Brian Armstrong said in a Sept. 15 X post that the SEC and CFTC “have the tools they need to create clear rules under existing authority,” adding that he expected regulators to begin working “in earnest.”

What to watch next as the filing moves from prerule to proposal

For now, the key unknown is the substance: the OIRA record confirms the CFTC’s intention to regulate crypto asset transactions and crypto asset markets, but it does not provide the operational details firms will need to prepare. The next developments to monitor are when the action advances beyond prerule, whether it is broken into specific proposed rule components, and how it aligns—or potentially conflicts—with concurrent SEC efforts affecting tokenized securities and onchain trading.

The U.S. Commodity Futures Trading Commission has taken another step toward formal rulemaking for crypto-related markets, submitting a regulatory action for White House review as it continues to outline how digital asset transactions could be regulated under existing authorities.

According to a filing posted to the Office of Information and Regulatory Affairs (OIRA) on Reginfo.gov, the action—titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets”—was received on Sept. 17 and is currently listed at the “prerule” stage. That designation signals the process is still early and the agency has not yet issued a formal proposed rule.

Key takeaways

• The CFTC filed a new crypto-focused rulemaking action with OIRA on Sept. 17, but it remains in the early “prerule” stage.
• The filing does not provide specific regulatory details, suggesting further information will come later in the rulemaking timeline.
• Recent U.S. legislative momentum weakened after the Senate failed to advance the CLARITY Act, while both the CFTC and SEC signaled they would proceed with or without new law.
• In the days following Sept. 15, the regulators also took separate enforcement-adjacent steps: a CFTC no-action position and an SEC temporary exemption framework.

What the CFTC filing indicates—and what it doesn’t

The OIRA posting for the CFTC’s action, labeled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” confirms the agency is moving toward a more structured regulatory approach for crypto trading activity and market infrastructure. However, the filing itself does not lay out the substance of what the CFTC intends to regulate, such as which categories of market participants, trading arrangements, or operational requirements would be covered.

The “prerule” listing matters for readers because it usually precedes a proposed rule by moving the action through early interagency or administrative review. That means market participants should treat the filing as a signal of direction rather than a preview of enforceable standards.

For investors and firms planning compliance work, the practical takeaway is that the CFTC is building a pathway toward a dedicated crypto asset market regime. The missing details, meanwhile, leave compliance teams with uncertainty about timing and scope—until a proposal is published.

Legislation stalls as regulators lean on existing authority

The filing arrives shortly after the U.S. Senate did not advance the CLARITY Act, a bill intended to establish a federal framework for regulating crypto markets. With that legislative path effectively blocked in the near term, senior regulators have repeatedly pointed to their ability to move using existing statutory authority.

Coinciding with that backdrop, CFTC Chair Michael Selig posted on X that the agency was “locked in and ready to ship” rules for crypto markets using existing authority. In parallel, SEC Chair Paul Atkins said the SEC would advance “with or without legislation,” as reflected in his posts on X.

Earlier remarks from Selig also suggested that the CFTC had considered a rulemaking approach even if Congress did not act. Speaking at the CFTC’s Innovation Advisory Committee conference on Aug. 20, he said the agency was prepared to use existing authority to establish a crypto asset market regime if the CLARITY Act stalled. He also discussed directing CFTC staff to explore rule concepts that could allow existing registrants and currently unregistered crypto exchanges to operate within a “crypto asset market” structure—an arrangement that would be overseen under CFTC rules and could include leveraged or margined crypto trading.

For the sector, this signals an ongoing tug-of-war between market expectations of comprehensive legislation and the reality that regulators may still set guardrails via rulemaking and targeted regulatory relief.

Regulatory actions after Sept. 15: relief and exemptions move in parallel

A day after the Sept. 15 Senate vote, the CFTC and SEC each took actions that, while different in scope, pointed to a broader theme: regulators are continuing to shape the crypto trading environment even without a new overarching statute.

On the CFTC side, the agency issued a no-action position for providers of passive software, as described in earlier coverage. While the details of eligibility are specific to the no-action framework, it underscores that the CFTC is willing to use regulatory discretion to manage particular technical implementations around crypto trading.

On the SEC side, it announced temporary exemptions for certain platforms facilitating onchain trading of tokenized securities, according to posts on X from the SEC.

Industry reaction: expectation of near-term rulemaking

Outside the regulators, industry leaders have also signaled readiness for regulatory work to proceed. Coinbase CEO Brian Armstrong said he expected regulators to move forward after the vote, stating that the SEC and CFTC have “the tools they need to create clear rules under existing authority.” In that same Sept. 15 X post, Armstrong said he expected them to begin working on the issue “in earnest,” adding that “So clarity is coming to crypto regardless.”

While those comments are not the same as regulatory text, they reflect how market participants are interpreting the balance of power: when legislative clarity is delayed, compliance strategies increasingly have to follow the pace of rulemaking and regulatory relief.

What to watch next

The immediate uncertainty is what the CFTC’s Sept. 17 “prerule” action will translate into once it advances toward a proposed rule—especially around the scope of “crypto asset transactions” and “crypto asset markets.” Market participants should watch for the next OIRA steps and any CFTC releases that clarify which market structures, trading practices, and platform roles will be prioritized.

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BlackRock has said stablecoins must remain interchangeable with bank deposits and central-bank money if they are to function as regulated settlement assets.

Stablecoins need recognition across banking systems

The European Blockchain Convention’s Day 1 media briefing attributed the position to Nikhil Sharma, BlackRock’s head of digital assets, during a panel on how tokenized forms of money can operate together.

Sharma said the central issue is the “singleness of money,” a principle under which different forms of the same currency remain interchangeable at face value. The form of payment may change, but users must understand the claim, backing, access conditions, and recourse attached to it.

“When you think about what you’re using as cash for payments and settlement, you look at what’s the claim, what’s the backing, what’s the form, what’s the access,” Sharma said.

His comments addressed how privately issued stablecoins, commercial-bank deposits and central-bank money could operate within one financial system. A user paying with a dollar stablecoin, for example, would need the recipient’s bank to recognize the asset and convert it into a deposit liability without creating uncertainty over its value.

“In tangible terms: I could pay through a stablecoin, and the banking infrastructure needs to accept that, transform it into a deposit liability, and provide that recourse.”

Banks would also require a settlement system for payments moving between institutions. Sharma placed central banks at that final layer, where obligations between regulated financial institutions can be settled in central-bank money.

Different forms of cash create different risks

Sharma said investors can benefit from having several forms of digital cash, but each form carries its own economic exposure and redemption structure.

“From an investor-optionality standpoint, having different forms of cash is a good thing. But from a recourse, economic exposure, and risk standpoint, singleness of money is an imperative.”

A commercial-bank deposit represents a liability of the bank, while a stablecoin represents a claim structured by its issuer and governing terms. Central-bank money carries a direct claim on the monetary authority.

Stablecoin users therefore depend on the issuer’s reserves, custody arrangements, and ability to process redemptions. Even when a token tracks one dollar in normal trading, liquidity pressure or concern over its backing can cause it to trade below its stated value.

Interoperability alone would not remove those differences. According to Sharma, banking acceptance, conversion into deposits, and access to a final settlement mechanism must work together if stablecoins are to serve regulated financial markets.

Speaking from a central-bank perspective, Philipp Müller of the Swiss National Bank said commercial banks could issue stablecoins if they chose to do so. His institution, however, must provide banks with a safe payment method suited to their requirements.

“That could be wholesale CBDC, it could still be fiat money. Only time will tell,” Müller said.

His remarks separated retail products from central-bank infrastructure. Commercial banks may offer cash instruments to customers, while the central bank concentrates on settlement between regulated institutions and financial stability.

Dollar stablecoins have created a U.S. policy question

For U.S. users, BlackRock’s argument concerns both the safety of stablecoins and their place in the dollar system. Most large stablecoins reference the U.S. dollar and keep substantial reserves in cash, Treasury bills, or similar liquid assets.

The United States enacted the GENIUS Act in July 2025, creating a federal framework for payment stablecoins. Under the law, only permitted issuers may issue payment stablecoins in the country, subject to reserve, disclosure, and regulatory requirements.

Dollar-linked tokens can extend access to the currency outside conventional banking hours and across national borders. Their growth can also increase demand for the reserve assets issuers use to support redemptions.

As crypto.news previously reported, European Central Bank Executive Board member Isabel Schnabel said dollar-backed stablecoins could strengthen the dollar’s international position as the sector approached a market value of $300 billion. Euro-denominated stablecoins accounted for only a small share of the market, according to her remarks.

The same development has raised concerns in Europe about dependence on dollar payment products. Schnabel supported the digital euro as a public payment option, with a pilot expected in 2027 and potential readiness for issuance targeted for 2029.

Stablecoin reserves also connect token holders with the U.S. government-debt market. When issuers use short-term Treasuries to back circulating tokens, growth in stablecoin supply can translate into additional demand for those securities.

For holders, reserve quality does not make a stablecoin identical to an insured bank deposit. Redemption terms, legal priority, eligible customers and access to deposit protection can differ by product and jurisdiction.

Tokenized markets still depend on settlement cash

Sharma said the infrastructure needed for stablecoins and tokenized deposits begins with bank acceptance before moving to interoperability between institutions and final settlement.

“How will that happen? It’s about the layers of infrastructure coming together, starting with the banking infrastructure, in terms of acceptance and interoperability between tokenised deposits and stablecoins,” he said.

The final stage would involve a settlement layer capable of completing obligations without disrupting existing banking systems. Sharma said the mechanism could be provided in a “potentially unintrusive way,” although he did not specify one technical model.

Tokenized securities make the cash question more urgent because trading an asset on a blockchain does not guarantee that the payment side can settle on the same schedule. Markets may offer continuous transfers while banks, payment systems and foreign-exchange services continue to observe limited operating hours.

A recent examination of the weekend dollar funding gap found that always-open tokenized markets can face liquidity pressure when conventional dollar rails are unavailable. Settlement may remain incomplete even after the asset side of a transaction moves onchain.

During another Day 1 panel, ARK Invest’s Lorenzo Valente put the digital-asset market at about $3 trillion, with stablecoins accounting for roughly $300 billion and tokenized assets between $30 billion and $40 billion.

Valente said crypto had primarily been a retail market during its first decade because institutions lacked scalable tools, privacy, and sufficient compliance controls. He argued that the market had become large enough to draw more institutional capital as those gaps began to narrow.

BlackRock’s Sharma focused instead on how institutions could use different forms of regulated cash without losing a common settlement value. Banks would accept stablecoins, convert them into deposits, and settle their obligations through a layer supported by central-bank infrastructure under the model he described.