The SEC reportedly plans to allow TradFi stocks to trade onchain by means of RWA tokenization. This would enable retail investors to bypass several key restrictions and use a Web3-native stock trading experience.
Although it’s unclear when the rollout will happen or how ambitious it will be, the Commission is reportedly making this a priority. We could see a permanent transformation to TradFi markets in the next few days.
SEC’s Onchain Stock Trading
The SEC has had a lot on its plate since beginning its newest pro-crypto initiatives, working on new ETF listing standards and regulatory innovation exemptions, among many other concerns. However, a new report details a particularly ambitious goal, as the Commission plans to allow TradFi stocks to trade onchain:
SponsoredThis news comes via a recent report, and it could have bombshell implications. The SEC’s proposed mechanism for bringing stocks onchain is fairly simple: it would offer tokenized RWAs. This would allow retail traders to purchase tokens whose value is directly linked to TradFi stocks like Tesla, Nvidia, or any of the other “Magnificent 7” tech firms.
A Huge Opportunity
In other words, crypto investors would gain several distinct advantages. They could move their assets around 24/7/365, independently of TradFi’s market hours. This would also allow users to bypass regular brokerage institutions on the stock market, conducting business solely on Web3-native exchanges.
BlackRock has been exploring RWA tokenization to bring TradFi stocks onchain, but its experiments were localized to ETFs. The SEC, by contrast, would open these services to a much wider range of products.
It’s currently unclear if the Commission plans to launch a pilot program with a few stocks, or a laissez-fair approach where exchanges could list whatever assets they please. In any event, it plans to effectuate a concrete rollout “quickly.”
The SEC is under political pressure to adopt a lot of different pro-crypto measures, but this onchain stock program seems like a particular priority. After all, the Trump administration is interested in TradFi/Web3 integration, putting economic data on the blockchain last month.
Hopefully, the SEC will release an official announcement with more in-depth explanations soon. Putting Magnificent 7 stocks onchain would already be a huge market opportunity, but a total free-for-all could transform TradFi markets forever.
