The U.S. Securities and Exchange Commission (SEC) is preparing a new system that would allow third parties to issue and trade U.S. stock-based tokens even without the issuing company’s consent, a report said. As the possibility is raised that U.S. stocks could be traded within the decentralised finance (DeFi) market, the boundary between traditional finance and the blockchain market is again being shaken.

On May 19 local time, blockchain outlet Coinpost reported that the SEC is expected to announce an “Innovation Exemption” system as early as this week. The system has the character of an experimental regulatory framework that allows tokenised securities trading on a limited basis.

The key point is that third parties can create U.S. stock-based tokens even if the issuing company does not participate directly. However, the tokens must provide the same economic rights as existing shares. They must guarantee rights equivalent to those of existing securities, such as voting rights and dividends. If these requirements are met, securities trading would become possible on blockchain-based DeFi platforms.

The SEC views the step as a long-term experiment to test whether a tokenised securities market can function in practice, separate from existing financial markets. SEC Chairman Paul Atkins (폴 앳킨스) and others are known to be leading it, and it is interpreted as an attempt to bring blockchain-based capital markets into the institutional framework.

The move is also linked to the tokenised securities classification framework the SEC announced earlier this year. At the time, the SEC divided tokenised securities into issuer-led and third-party-led types, and the exemption system is assessed as a follow-up measure close to concretising the legal framework for third-party-led securities.

Traditional finance is also accelerating related infrastructure buildouts. Nasdaq has already received approval for a rule change allowing tokenised settlement of stocks and exchange-traded funds (ETFs). Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, is also known to be preparing a blockchain-based asset trading structure.

Markets believe that if the system is implemented, trading of U.S. stock-based synthetic assets could increase sharply in the DeFi market, which is worth about $130 billion. That is because it would allow people to invest in U.S. stock price movements within blockchain-based services without a traditional brokerage account. As a result, the possibility is also being raised that U.S. stock trading could expand from the existing exchange-centred structure to on-chain markets.

Concerns are also significant. From an investor protection perspective, there are comments that liquidity could be dispersed across multiple markets. Smart contract security issues are also a key risk factor. This year, DeFi platforms have repeatedly seen hacks and fund outflows worth hundreds of millions of dollars.

For this reason, the securities industry and some large financial companies are showing wariness about introducing the exemption system. Major financial firms including Citadel are reported to be concerned that tokenised securities could disrupt the existing market order.

The regulatory environment is also a variable. In the U.S. Congress, review is under way of the CLARITY bill, which sets supervisory authority over cryptocurrencies. In this situation, attention is focused on what changes the SEC’s new experiment could bring to the structure of the U.S. capital market itself.

Ultimately, the key issue going forward is how far anti-money laundering, investor protection and hack response systems can be secured while using blockchain’s payment efficiency and accessibility. Another point to watch will be whether tokenised securities remain an auxiliary tool of existing finance or take hold as a new trading infrastructure.