SEC is Getting Closer to the Crypto World: They Announced a New Move Today, What Does It Mean?

The US Securities and Exchange Commission (SEC) has taken a new step that will allow stocks to be traded on-chain, similar to cryptocurrencies.

This development could pave the way for investors to be able to buy and sell tokenized shares of giant companies like Tesla and Nvidia via crypto exchanges in the near future.

Bloomberg analyst Eric Balchunas commented on the move, arguing that it shouldn't be seen as a major “market revolution.” “This allows crypto investors to buy traditional stocks in their preferred format, just as ETFs make it easier for ordinary investors to access crypto. However, there's a much larger capital involved, so tokens are unlikely to significantly impact ETF market share,” Balchunas said.

The new regulation could have different consequences depending on which platforms tokenized securities are traded on. If these assets remain within the “closed ecosystems” of traditional brokerage firms, there is no additional risk because KYC (know-your-customer) processes are already in place.

However, the situation could change if tokenized shares are traded via decentralized protocols like Uniswap or wallets like MetaMask or Trust Wallet. In such a scenario, users could be required to undergo KYC processes. This raises critical questions such as, “Will all crypto wallets be subject to KYC?” and “Will this requirement be reflected in Bitcoin-focused wallets as well?”

*This is not investment advice.