The U.S. SEC temporarily halts approval of "RWA tokenized US stocks"! Wall Street worries that 24/7 trading will shatter market liquidity

The U.S. Securities and Exchange Commission (SEC) originally planned to launch an "Innovation Exemption," allowing blockchain-based tokenized stock trading of U.S. equities. However, due to strong opposition from traditional financial institutions, the SEC has decided to pause. Wall Street fears that 24-hour trading of tokenized stocks will lead to "liquidity fragmentation" and raise investor protection concerns.
(Background: The U.S. SEC relaxed 80% of corporate financial reporting thresholds, with Chair Paul Atkins proclaiming: "Make IPOs Great Again")
(Additional context: SEC abolishes the $25,000 day-trading threshold! The 25-year PDT rule was officially repealed on 6/4)

Table of Contents

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• Wall Street's Concerns: Liquidity Fragmentation and Investor Rights
• RWA Track Explodes, Market Cap Surges 1,600%
• A More Complete Version Expected Later This Year

The positive clash between traditional financial giants and crypto innovation has forced the much-anticipated "Tokenized Stocks" process to be put on hold.

According to the latest report from Bloomberg, the SEC has decided to delay a plan called "Innovation Exemption." This plan was originally intended to allow crypto companies and DeFi platforms to issue blockchain tokens tracking companies like Apple, Tesla, and other U.S. listed firms, enabling 24/7 trading, faster settlement, and fractional ownership.

Wall Street's Concerns: Liquidity Fragmentation and Investor Rights

The SEC's concession mainly stems from strong opposition from traditional exchanges and market participants on Wall Street. The objections focus on three core issues:

• Liquidity Fragmentation: Traditional financial institutions worry that if crypto stock tokens and the regular stock market operate in parallel, it will severely disperse trading volume, undermining the current price discovery mechanism and overall market efficiency.
• Investor Protection Blind Spot: Many tokenized stocks are minted by third-party platforms without the issuer company's (e.g., Apple) consent. These tokens often do not grant holders full dividend rights or shareholder voting rights, posing higher legal and investment risks for retail investors.
• Regulatory Caution: Although current SEC Chair Paul Atkins is known for a relatively friendly stance toward cryptocurrencies, under immense pressure from traditional finance, the SEC has chosen to pause and gather broad market feedback before advancing the framework.

RWA Track Explodes, Market Cap Surges 1,600%

Although the SEC has temporarily halted the full rollout of tokenized stocks, the macro trend of real-world assets (RWA) going on-chain is unstoppable.

Data shows that the total value of the RWA market has already surpassed $33.8 billion, experiencing an explosive growth of 1,600% over the past two years. Among them, the market cap of tokenized stocks alone has exceeded $1 billion.

Ethereum remains the dominant issuance platform in this wave, followed closely by Solana; institutional-grade products like BlackRock’s BUIDL fund further demonstrate the strong desire and real demand from traditional capital for blockchain technology.

A More Complete Version Expected Later This Year

Although the "Innovation Exemption" plan is temporarily stalled, it does not mean tokenized stocks are dead in the water. Insiders reveal that the SEC is still actively reviewing related frameworks, and after addressing concerns about investor protection and liquidity dispersion, it is highly likely that a more comprehensive regulatory version will be launched later this year.

This incident profoundly reflects the ongoing tug-of-war and growing pains between the disruptive efficiency of decentralized finance (DeFi) and the pursuit of stability in traditional financial markets.