Solana Policy Institute Urges SEC to Tighten Blockchain Test for Tokenized Stocks
RWA Signal Insight
InfrastructureThe Solana Policy Institute, Hedera, and SIFMA have formally petitioned the SEC to clarify the definition of public, permissionless distributed ledgers within the context of tokenized stock trading venues. The SEC currently offers a five-year exemption allowing venues to facilitate tokenized U.S. stock trading without traditional exchange registration, provided they utilize public, permissionless infrastructure. Industry participants are debating whether networks utilizing permissioned validators—such as Hedera or specific Layer 2 solutions—satisfy these regulatory requirements. This ambiguity directly impacts three entities that have filed notices to operate under this exemption: TSV LLC, OKXICE TSV, and Kephas Corporation. These firms intend to utilize the Canton Network, XLayer, and Kronos X Public, respectively, to support their operations. The SEC has clarified that filing a notice does not constitute agency endorsement or guarantee that a chosen blockchain meets the exemption's criteria. This regulatory friction is critical for the RWA market as it determines which blockchain architectures are legally permissible for the tokenization of regulated financial securities. Establishing clear standards for network control, censorship resistance, and rule governance is essential for institutional adoption of on-chain equity trading.
Key points
- SEC exemption allows tokenized stock trading without traditional exchange registration for five years.
- Solana Policy Institute and Hedera are lobbying for permissioned validator inclusion in public networks.
- TSV LLC, OKXICE TSV, and Kephas Corporation have filed notices to operate under SEC exemptions.
- SEC maintains that filing a notice does not equate to formal approval of network infrastructure.
Background
The SEC's exemption for tokenized securities venues is a regulatory sandbox initiative designed to foster innovation in digital asset trading. It allows platforms to test the viability of blockchain-based settlement for U.S. equities while maintaining investor protections. By requiring the use of public, permissionless ledgers, the SEC aims to ensure transparency and decentralization in the underlying market infrastructure.