SEC Chair Paul Atkins said the agency is close to adopting an “innovation exemption” that would let market participants trade tokenized securities onchain inside a tightly controlled, compliant framework. Speaking at the Economic Club of Washington, Atkins described the exemption as a limited, time-bound pathway to let firms begin facilitating onchain trading while the SEC works on longer-term rules.
The proposal would establish a structured sandbox for experimentation in blockchain-based securities markets—an area in the US that has been constrained by unclear regulatory guidance. The exemption has been under internal consideration for months as the agency seeks ways to accommodate tokenization and novel trading methods. Atkins previously indicated in July 2025 that the SEC was weighing targeted relief to support tokenization.
Commissioner Hester Peirce has likewise said staff are developing the exemption to permit controlled, small-scale testing of tokenized securities while the commission evaluates how existing securities laws apply to onchain markets.
Atkins’ remarks follow the SEC’s recent effort to clarify how digital assets fit under federal securities laws. On March 17 the agency issued interpretive guidance proposing a token taxonomy that groups digital assets into categories such as digital commodities, collectibles, platforms/tools and stablecoins, while keeping tokenized securities primarily under the SEC’s authority. The taxonomy was presented as a bridge toward potential market-structure legislation and as a step to clarify lines between the SEC and the Commodity Futures Trading Commission; Atkins called the taxonomy long overdue. The proposed interpretation was forwarded to the White House for review on March 24 and, according to the latest government records, remains under review.