The U.S. Securities and Exchange Commission (SEC) is preparing to dramatically reshape the stock market by pushing forward a plan that would allow publicly traded shares, like those of Tesla and Nvidia, to be issued and traded as tokens on blockchain networks. This idea, rooted in the expanding influence of blockchain technology, is being positioned as a way to create greater transparency, cut trading costs, and eliminate the multi-day settlement periods typical of the current system.

Under this new framework, investors would be able to buy and sell tokenized versions of stocks on regulated cryptocurrency exchanges. Each token would represent a legal share of a company, with the ownership and transfers transparently documented on the blockchain rather than through traditional, often opaque, clearinghouses. SEC Chair Paul Atkins has called tokenization a key financial innovation, suggesting that regulators should find ways to promote market efficiency and wider access through new technology.

The plan is generating significant excitement among crypto industry players. Exchanges like Coinbase and Robinhood are lobbying for approval, eager to open up blockchain-based stock trading to their customer bases. Both are already experimenting with synthetic stock tokens in international markets, and platforms like Nasdaq are pursuing rule changes to list tokenized securities.

However, established Wall Street firms, including big banks and brokers, are pushing back. They argue that their current infrastructure—responsible for much of their profits—could be undermined by a system that moves trading and settlement directly onto the blockchain. Some, like Citadel Securities, have voiced concerns about whether tokenization will bring real benefits or simply create regulatory gaps.

Despite the enthusiasm, the SEC’s plan remains in its formative stages. The agency is actively discussing the details with various stakeholders and monitoring related issues, like suspected stock manipulation tied to social media promotions. While more than $31 billion in assets have already been tokenized in other sectors, equities make up only a small fraction of this figure so far.

This bold initiative signals an ongoing battle between the traditional giants of Wall Street and innovative upstarts in the crypto space, with the future of how stocks are traded hanging in the balance. As the SEC moves forward, the coming years may see a fundamental shift in the relationship between technology and the public markets.