SEC Commissioner Hester Peirce has urged the crypto industry to temper expectations regarding the "innovation exemption" for trading tokenized stocks. She stated that the regulator does not plan to allow the issuance of synthetic assets.
I appreciate the interest in--but not the hyperbole about--the contemplated innovation exemption for the onchain trading of tokenized NMS stock. Keep in mind: I've always expected that it'd be limited in scope & would facilitate trading only of digital representations of the same…
— Hester Peirce (@HesterPeirce) May 21, 2026
Peirce's statement followed a report from Bloomberg, which indicated that the Commission is preparing rules for the tokenization of stocks without the consent of issuers. According to the agency, the SEC has discussed guidelines for trading RWA securities with "hundreds of market participants."
Peirce clarified that the exemptions would only apply to digital copies of stocks that are already traded on the secondary market. Tokens must confer the same rights as traditional securities, including voting and dividends, she emphasized.
Carlos Domingo, CEO of Securitize, supported this position, arguing that the issuance of tokens by third parties without issuer involvement fragments the market and creates risks.
This is good, we want to do on-chain trading, but for the right assets, and not to help proliferate those derivatives that are fragmenting the market and introducing additional risks. Tokenization is needed to solve problems and eliminate intermediaries, not to add new additional… https://t.co/vNTfC5vOoF
— Carlos Domingo (@carlosdomingo) May 22, 2026
Robert Leshner, CEO of the Superstate platform, agreed, believing that a strict approach will maintain the standards of the U.S. financial market while implementing DeFi.
The SEC has been hard at work crafting an innovation exemption that will bring securities into the tokenization & DeFi era, without compromising the standards that make the USA the center of capital markets.
More innovation, done well, soon 👏 https://t.co/x1nNUMM9gF
— Robert Leshner (@rleshner) May 21, 2026
According to RWA.xyz, $1.53 billion worth of stocks have been issued, including those from Circle, Strategy, and Google. The sector is growing slower than analysts had predicted, who expected trillion-dollar volumes by 2030.
Source: RWA.xyz.Risks of RWA
The Bloomberg publication also drew a response from Ryan Yoon, head of research at Tiger Research, who warned about the risks of liquidity fragmentation due to the tokenization of stocks without issuer consent.
— Tiger Research (@tiger_research_) May 22, 2026
The expert believes that capital will begin to flow from centralized platforms to various blockchain networks. This will dilute trading volumes currently concentrated on the NYSE or Nasdaq.
"Traditional finance sees a serious threat in the fragmentation of consolidated liquidity," Yoon stated.
Market fragmentation will lead to price discrepancies across different platforms and slippage during large trades. Tiger Research believes this will reduce overall market efficiency.
The second issue will be profit outflow. When tokenized stocks are traded on multiple decentralized platforms, exchange revenues will shift offshore, undermining the country's financial competitiveness.
Maia Vujnic, head of the digital assets department at FG Nexus, added that the division of the market into "isolated pools" will create pricing errors. There is also a risk of "shadow short selling" due to a lack of local buyers to stabilize prices.
Proponents of tokenization point to its advantages:
- instant settlements;
- fractional ownership of assets;
- low fees;
- 24/7 trading.
Brian Witten, an analyst at Siebert Financial, is confident that the SEC's decision will accelerate the transition of the financial system to blockchain. He predicts that some capital will eventually flow into Bitcoin and Hyperliquid networks.
It is worth noting that in May, it was announced that the Bank of England would focus its future strategy on RWA to modernize the country's economic sector.