$30 Trillion U.S. Stocks, 'To Blockchain'?...Wall Street Power Struggle Over SEC Innovation Exemption

▲ U.S., Crypto Regulation/AI Generated Image

A power struggle between Wall Street and the cryptocurrency industry is intensifying to move the $30 trillion U.S. stock market onto a blockchain settlement network, driven by the convergence of the U.S. Securities and Exchange Commission's (SEC) innovation exemption, the U.S. crypto market structure bill, and DTCC's tokenization services.

Louis Raskin, host of the crypto-focused YouTube channel Coin Bureau, explained in a YouTube video released on May 26 (local time) that the SEC's innovation exemption is a key regulatory mechanism for opening the tokenized securities market. This exemption acts as a regulatory sandbox, allowing crypto-native platforms to list and trade tokenized versions of stocks, bonds, and private equity. Raskin noted that the U.S. crypto market structure bill passed the Senate Banking Committee on May 14 with a vote of 15 to 9, establishing a framework that classifies Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and XRP as digital commodities.

The video highlighted that the innovation exemption, the U.S. crypto market structure bill, and DTCC's tokenization services could be connected into a single settlement infrastructure. DTCC received a three-year no-action letter in December 2025 and plans to launch commercial operations in October after beginning limited production trading in July. Nasdaq received SEC approval in March to trade tokenized versions of Russell 1000 stocks and ETPs on the same order book as traditional stocks. The New York Stock Exchange (NYSE) received approval for a 24/7 on-chain settlement platform in April and subsequently selected Securitize as its build partner. With the addition of cases like Robinhood, Kraken, and BlackRock's BUIDL, tokenization infrastructure has already entered the market.

Raskin presented the most crucial legal issue as whether third parties can tokenize shares of listed companies like Apple or Amazon without issuer permission. If the innovation exemption broadly permits third-party tokenization, Kraken, Robinhood, DeFi protocols, and public Layer 1s could benefit. Conversely, if only issuer-approved tokens are allowed, Securitize, DTCC, and existing compliance infrastructure would dominate the market. Brett Redfearn, President of Securitize, warned that tokenization without issuer involvement could create multiple wrapped assets for the same company and increase market fragmentation. Citadel Securities and SIFMA also opposed a broad exemption framework, citing concerns about weakened KYC/AML controls, regulatory arbitrage, and the risk of multiple price formations for the same stock.

Beneficiary tokens mentioned included Ondo Finance (ONDO), MKR, and Chainlink (LINK). As per the video, ONDO was trading at $0.378, up 48% over the past 30 days, with a market cap of $1.19 billion, holding approximately 60% market share in the tokenized stock issuance market. MKR was at $1,726, with a market cap of $1.5 billion, down 11% over the past 30 days, but Sky Protocol recorded a record revenue of approximately $124 million in Q1, and its real-world asset holdings within the protocol exceeded $1.5 billion. LINK was presented at $9.62, with a market cap of $6.81 billion, up 3.5% over the past month, and Chainlink's cross-chain interoperability protocol recorded $18 billion in transaction volume in Q1 alone. Raskin emphasized that Chainlink provides the necessary oracle and interoperability infrastructure for both third-party tokenization and issuer-approved models.

The video also warned of the possibility that Wall Street, while embracing the tokenization market, might replicate existing gatekeeper structures on the blockchain. The DTCC platform operates not on Ethereum or Solana but on the Canton Network, a permissioned enterprise blockchain sponsored by Goldman Sachs. Analysis also suggested that approximately 78% of the tokenization market consists of wrapped claims on off-chain assets held by traditional custodians. Raskin stated that investors should watch the final wording of the innovation exemption, the plenary vote on the U.S. crypto market structure bill, DTCC's July launch, Securitize's Nasdaq listing, and JPMorgan's JLTXX Ethereum public chain filing. He concluded that if permissionless and decentralization are realized, the real-world asset tokenization sector could experience a structural bull market by 2027, but if traditional financial institutions seize control of the rails, retail investors might only hold wrapped assets without rights, and only infrastructure tokens could remain as long-term winners.

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