The U.S. Securities and Exchange Commission has once again postponed at least part of its planned “innovation exemption” for tokenized securities, a rule change that had been expected to accompany a now-canceled “Reg Crypto” open meeting on Friday. It is the second known delay to the initiative this year, following an earlier setback in May 2026, according to three industry sources familiar with the matter.
The exemption is meant to let firms issue and trade tokenized securities on blockchain rails without waiting for a full formal rulemaking process, instead allowing them to operate under existing securities law with modified conditions. SEC Chairman Paul Atkins has publicly signaled support for blockchain modernization, and Commissioner Hester Peirce has argued the relief would simply cover “digital representations of the same underlying equity security.”
Wall Street Wants a Slower, More Formal Process
The Securities Industry and Financial Markets Association, which represents major broker-dealers and investment banks, is among the loudest voices urging caution. The group has argued that structural change of this scale belongs in formal rulemaking, not an exemption:
Significant structural changes should be considered and made through an open and transparent process.
SIFMA's specific concerns include how blockchain-based trading venues would fit within Regulation NMS, how brokers would satisfy best-execution obligations when pricing runs through decentralized venues and automated market makers, and whether existing market-structure rules can stretch to cover on-chain settlement.
A Fragile Legislative Backdrop
Timing is part of the problem. The White House is reportedly wary that a sweeping SEC exemption could, as one characterization put it, kick a hornet's nest while lawmakers negotiate the Digital Asset Market Clarity Act. That bill has already cleared the House, but the Senate left Washington for its five-week August recess without a floor vote, instead filing a cloture motion that sets up a procedural vote for September 15. Missing the original August 10 deadline narrows the window considerably: lawmakers will have only about 14 working days before an October recess, and a slip into 2027 is now a real possibility.
Related: Coinbase's Deribit Wins Dubai Broker-Dealer Licence to Route Trades
The caution at the SEC stands in contrast to how quickly some other regulators are moving on crypto market structure. Dubai's Virtual Assets Regulatory Authority, for instance, recently granted Coinbase's Deribit a broker-dealer licence to route institutional trades, underscoring how unevenly the global regulatory pace is playing out even as U.S. agencies negotiate among themselves over sequencing.
Infrastructure Is Moving Ahead Regardless
Market infrastructure isn't waiting for Washington to finish deliberating. The Depository Trust & Clearing Corporation processed its first live production trades involving tokenized securities in July 2026, and both Nasdaq and NYSE are building out tokenized-asset infrastructure of their own. Citi has projected the tokenized-asset market could reach $5.5 trillion by 2030, a figure that helps explain why exchanges and broker-dealers alike are pushing the SEC to settle the rules of the road rather than leave the exemption in limbo.
For now, SEC staff are said to be increasingly focused on more basic procedural questions: whether the agency has clear legal authority to grant the exemption, whether it has completed adequate economic analysis, and whether it has followed the steps required under the Administrative Procedure Act. Until those questions are resolved, tokenization's biggest U.S. regulatory unlock will likely remain stuck behind the same institutional caution slowing the Clarity Act itself.
