Solana Policy Institute Urges SEC to Tighten Blockchain Test for Tokenized Stocks
The 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.