SEC caps tokenized stock volume at 0.25% of daily trading

The SEC’s five-year exemption for tokenized U.S. stocks is deliberately narrow. Qualifying Tokenized Securities Venues (TSVs) can trade real shares without registering as national exchanges, but the rules cap the volume each venue can handle. For the most liquid stocks, a venue may tokenize no more than 75 names and execute at most 0.25% of the average daily trading volume, according to the SEC’s framework.

That cap defines the experiment’s scale. Using Tesla as the example, the SEC notes an average daily volume of about 40 million shares. At that rate, a venue could facilitate roughly 100,000 tokenized Tesla shares a day. With the stock trading around $366, that totals approximately $36.6 million in daily onchain activity per venue.

Jamie Selway, the SEC’s director of trading and markets, explained the logic behind the limits. “The motivation for that was to, obviously, make a modest start,” Selway said. “Let’s get people going, measure the effect.”

A second tier of stocks faces higher thresholds, allowing up to 250 names and 2.5% of average daily volume. The framework also protects issuers from unwanted tokenization. Before a third party lists a tokenized version of a stock, the venue must provide the company with 30 days’ notice and an opportunity to object. Joris Delanoue, CEO of Fairmint, called this provision “the issuer veto” and identified it as the key safeguard. Unlike synthetic products that merely track price, these tokens must preserve voting, dividend, and other shareholder rights, while the trading environment remains permissioned despite using public blockchains.