The SEC issued an order on September 17 allowing blockchain platforms to trade tokenized versions of US-listed stocks without registering as traditional exchanges. These tokens must mirror the rights of the underlying shares. The regulatory relief is limited to five years and applies only to approved participants, with specific caps on trading volume and available symbols.
Gabor Gurbacs, CEO of Openassets, suggests that tokenization could eliminate six or seven of the nine intermediaries currently involved in stock trading. While the underlying settlement processes and costs may change, the experience for individual investors is expected to remain largely consistent with current brokerage models.
Nick Cherney of Janus Henderson notes that cost efficiency alone may not drive adoption in the already efficient US market. He highlights potential new use cases, such as using S&P 500 funds for rent payments. Janus Henderson currently manages approximately $30 billion in its flagship ETF, while its offshore tokenized fund ranges between $500 million and $1 billion.
The global ETF market is valued at approximately $24 trillion, whereas the total value of tokenized assets, including stablecoins, remains below $500 billion. Currently, about 200 institutions utilize Janus Henderson’s tokenized funds, serving as a benchmark for potential future adoption among US investors during the five-year exemption period.
