Cuomo says tokenized stock trading is outpacing Washington after SEC exemption
Cuomo says tokenization is racing ahead of the rulebook
Former New York Governor Andrew Cuomo argues in a CoinDesk opinion piece published Sept. 25 that putting real-world assets such as stocks onto blockchains is moving faster than regulators in Washington. Tokenization means turning ownership of an asset into a digital token recorded on a blockchain, a shared digital ledger.
Cuomo writes from inside the industry: he is co-chair of a joint venture between Intercontinental Exchange, the parent company of the New York Stock Exchange, and OKX that is building infrastructure for tokenized and digitally native financial products. He also states he is a board member of OKX.
What the SEC's five-year exemption allows
Cuomo writes that on Sept. 17 the Securities and Exchange Commission created a temporary framework, which the agency calls an "Innovation Exemption," for limited trading of tokenized U.S. stocks. The details below come from his opinion piece.
- Qualified onchain venues can trade certain tokenized stocks listed on American exchanges without registering with the SEC.
- The exemption lasts five years and relies on automated market makers and liquidity pools, which are software-driven trading systems and shared pools of funds.
- All trading venue participants must be permissioned.
- Tokenized shares must give investors the same rights and privileges as traditional shares of an equivalent class.
- Venues face limits on the number and volume of tokenized securities they can trade.
- Issuers can object when unaffiliated third parties tokenize their shares.
- Smart contracts must be auditable and deployed on public blockchains.
- Trading in a tokenized security must stop when trading in the underlying security is halted.
The Senate bill that failed two days earlier
On Sept. 15, the Senate did not advance the Digital Asset Market Clarity Act, according to the piece. The cloture motion, a vote to move the bill forward, received 49 votes, short of the three-fifths threshold required. The bill would have set up a broad legal framework for digital assets and clarified the roles of the SEC and the Commodity Futures Trading Commission.
Cuomo notes there were real disagreements over the bill, including questions about consumer protection, banking, ethics, illicit finance and the powers of federal regulators.
An SEC chairman's description of the exemption
Cuomo quotes SEC Chairman Paul Atkins describing the exemption as a "bridge toward durable rulemaking." Cuomo adds that the exemption is, by definition, not a permanent regulatory structure.
What is supported by the source material
The roles Cuomo lists for himself, his argument, and the wording he attributes to Atkins all come from the opinion piece. The description of the SEC exemption and the Senate vote also comes from that piece. The supplied material does not include the SEC's own order or the Senate roll call, so those details are reported here as the author describes them rather than as independently reviewed documents.
What is still unclear
The piece does not name which venues or which stocks qualify under the exemption, and it does not say how the Senate bill will proceed. It also does not say whether or when the temporary framework will become permanent rules.
Why Cuomo says the gap matters
Cuomo argues that regulatory clarity is not only a legal or political question but an economic one. He points to his time as New York attorney general during the financial crisis, when subprime lending and complex mortgage securities spread risk through the financial system after outrunning oversight. His conclusion, he writes, is not that innovation should stop, but that innovation and regulation need to develop together. He describes the SEC approach as regulation used as a laboratory: allow experiments inside set guardrails, watch how the technology performs, and use what is learned to shape later rules.
What comes next
The exemption is set to run for five years, and Cuomo writes that the technology and the markets around it will keep advancing regardless of what happened in the Senate. He does not offer a timeline for new legislation.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.