On 17 September 2026, the U.S. Securities and Exchange Commission (SEC) announced temporary, conditional exemptive relief allowing qualifying tokenized securities venues to use automated market makers and liquidity pools for permissioned trading of certain tokenized National Market System (NMS) stocks. The SEC also requested public comment. The relief applies to specified venues and trading structures; it is not available indiscriminately to all cryptocurrency platforms and does not amount to blanket approval of all tokenized assets.
Liquidity pools change how trading works, not the existence of demand
Automated market makers generally use predefined rules to provide pricing or facilitate trades, while liquidity pools bring together assets available for trading. These mechanisms can change how transactions are organized, but they cannot create genuine buying demand out of nothing. When trading activity is limited, large orders can still cause significant price impact.
The SEC framework therefore includes several conditions. Limits apply to the number of stock symbols and trading volume. Venues must verify that holders of tokenized stocks receive the same rights and privileges as holders of the corresponding traditional shares. Smart contracts must be auditable, publicly available and deployed on a public, permissionless distributed ledger.
Trading halts, disclosures and liquidity provider relief
If trading in the underlying stock stops on its primary listing exchange, the venue must simultaneously stop trading in the corresponding tokenized stock. Venues must also disclose their own trading activity and that of their affiliates.
The SEC separately provides temporary, conditional relief from the statutory definition of “dealer” for certain liquidity providers that use proprietary capital to supply tokenized stocks to these pools.
The order specifies that the exemptions run from 17 September 2026 to 17 September 2031. The SEC may modify their duration or other terms, and is seeking public input on potential changes and next steps.
What users should check
For users, the key question is not simply whether a stock has been put on a blockchain. It is how the token’s rights correspond to those of the underlying stock, who maintains ownership records and handles corporate actions, which investors may participate, and how submitted orders are handled and protected during a trading halt.
Tokenization does not automatically eliminate custody risks, technical failures or price divergence.
A limited framework, not unrestricted approval
This development shows regulators addressing the specific conditions under which liquidity pools may operate in securities markets. It remains a temporary arrangement with a defined scope.
Claims that “the U.S. has fully approved on-chain stocks” or “all tokenized stocks can now trade freely” should be checked against the SEC’s stated limits on eligible securities, participation conditions and venue requirements.