Wall Street Is Reportedly Pushing Back On SEC’s Push For Tokenized Stocks

The Securities and Exchange Commission (SEC) is reportedly considering a plan to allow stocks to trade like cryptocurrencies on the blockchain, but traditional financial firms, including Citadel Securities, are pushing back.

According to a report by The Information, citing sources familiar with the matter, the SEC has been engaging with industry representatives about the initiative, which is a key priority of the Trump administration’s crypto-friendly regulatory agenda. If approved, the plan would let investors buy tokenized versions of shares in companies such as Tesla (TSLA) and Nvidia (NVDA) on cryptocurrency exchanges.

Coinbase (COIN) is among the firms seeking approval to offer tokenized equities to its customers. Paul Grewal, Coinbase’s chief legal officer, called the initiative a “huge priority” in an interview with Reuters. If granted, the move would allow Coinbase to provide stock trading via blockchain, potentially competing directly with retail brokerages such as Robinhood (HOOD) and Charles Schwab (SCHW) while opening a new business segment. Nasdaq (NDAQ) has also requested regulatory approval to list tokenized stocks.

COIN’s stock edged 0.5% lower in morning trade amid broader weakness in the market. On Stocktwits, retail sentiment around the company trended in ‘bearish’ territory over the past day. Meanwhile, NDAQ's stock traded 0.09% lower with retail sentiment in 'bullish' territory.

Tokenized equities are not yet available in the U.S., but several companies are experimenting internationally. Kraken recently announced xStocks, tokenized U.S. equities available in select foreign markets. Robinhood also launched tokenized versions of over 200 U.S. stocks and ETFs for European users in mid-2025, offering 24/5 trading with zero commissions. 

HOOD’s stock was up 1.7% in morning trade after hitting a fresh record high of $142.48 earlier in the session. The shares have gained more than 260% year-to-date. On Stocktwits, retail sentiment around the company improved to ‘neutral’ from ‘bearish’ territory, and chatter increased to ‘high’ from ‘low’ levels over the past day.

As part of the SEC’s Project Crypto, Chair Paul Atkins said he is “excited to see new use cases for crypto asset securities in commerce, such as the ability to participate in blockchain network consensus with tokenized equities.” Earlier this month, the U.S. and U.K. established a task force to align regulations for crypto and tokenized securities. A Treasury official said the effort aims to “unlock opportunities for investors, businesses, and market participants on both sides of the Atlantic.”

U.S. equities traded in the red on Tuesday morning ahead of the potential U.S. government shutdown. The SPDR S&P 500 ETF (SPY) was down 0.16%, the SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.03%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 0.18% lower. However, retail sentiment around QQQ on Stocktwits improved to ‘bullish’ from ‘neutral’ territory over the past day.

Read also: Bitcoin Pulls Back To $112K Ahead Of Potential US Government Shutdown

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