The SEC's Promotion of Blockchain-Based Stock Trading Triggers Turmoil in Traditional Finance, and the Reconstruction of the Financial Ecosystem Has Begun

In early October 2025, the U.S. Securities and Exchange Commission (SEC) is developing a plan to allow stock trading on blockchain technology—a move that could fundamentally transform the operation of the multi-trillion-dollar stock market. Under this proposal, investors will be able to purchase tokens representing shares of companies such as Tesla and NVIDIA on cryptocurrency exchanges in the future. This ambitious plan is regarded as a key component of the Trump administration’s agenda to support cryptocurrency regulation.

However, the path to this innovation is not smooth: the SEC’s proposal has already encountered strong opposition from traditional financial institutions, and an intense battle over the future of finance is unfolding.

The SEC’s proposal marks a significant shift in the U.S. approach to financial regulation. Under the leadership of Chairman Paul Atkins, the SEC is moving away from the prudent regulation of digital assets implemented in recent years toward a more proactive framework. The agency plans to establish a Digital Asset Innovation Center by the fourth quarter of 2025 and launch an initiative called "Crypto Initiative," which aims to simplify rules related to trading, custody, and product development. A core part of the SEC’s agenda includes proposing a framework to allow cryptocurrency trading on national securities exchanges and alternative trading systems—an effort expected to significantly expand market access for digital assets. Meanwhile, the SEC also plans to revise the financial responsibility rules for brokers and custody services to reduce the compliance burden on companies operating in the cryptocurrency space.

Most notably, the SEC is developing an "Innovation Exemption" mechanism that will allow both registered and unregistered entities to launch on-chain products without being constrained by outdated regulatory restrictions. This exemption is expected to be finalized by the end of 2025 and aims to provide developers and entrepreneurs with a clear regulatory safe zone. SEC Chairman Paul Atkins has publicly stated that many talents have left the U.S. due to the uncertain regulatory environment, and he hopes these new policies will enable innovators to build with confidence within the country.

Nevertheless, the plan has faced fierce resistance from traditional financial institutions. These institutions, which have established profitable business models within the existing market structure, are uneasy about the potential disruptive changes brought by blockchain technology. Major Wall Street banks, brokerages, and clearinghouses earn substantial profits through complex intermediation processes, while blockchain’s ability to enable direct peer-to-peer transactions could significantly diminish the value of these intermediaries. Notably, the opposition is not a complete rejection of the technology itself, but rather a concern about the speed of change and the extent of disruption. Traditional financial institutions need time to adjust their business models to adapt to the potential era of blockchain-based finance.

The SEC’s move to promote blockchain-based stock trading highlights the profound divide between traditional finance and the crypto world in terms of values and technological philosophy. From a technical perspective, blockchain-based stock trading essentially replaces part of the central registration and settlement functions with distributed ledger technology—directly challenging the traditional financial market infrastructure centered on the Depository Trust & Clearing Corporation (DTCC). The current system relies on multiple layers of intermediaries, with trade settlement taking T+2 days; in contrast, blockchain can enable near-instant settlement, significantly reducing counterparty risk and capital occupation.

The SEC’s proposal for blockchain-based stock trading goes beyond the scope of stock trading itself and is triggering a chain reaction across the entire financial ecosystem. In the field of tokenization of Real-World Assets (RWAs), changes are already evident. As of October 10, 2025, the total on-chain value of RWAs had reached $33.67 billion, representing a 7.67% weekly increase and hitting a record high. U.S. Treasury bonds in the RWA market further rebounded, rising from $7.7 billion to $8.4 billion (a 9.09% increase) and posting strong gains for two consecutive weeks. Meanwhile, the scale of commodity assets grew from $2.1 billion to $2.5 billion, a 19.05% increase, making it the most outstanding performer. These data indicate that market expectations and confidence in blockchain’s ability to host traditional financial assets are growing.

The development of blockchain-based stock trading has broad prospects but faces a tortuous path, confronting multiple challenges in technology, regulation, and the market. From a regulatory perspective, although the SEC’s proposal is innovative, the difficulty of implementation should not be underestimated. Currently, the U.S. federal government is in a partial shutdown, which has paralyzed many of the SEC’s daily operations. The government shutdown has suspended work such as the review and approval of ETF applications—while applications can still be submitted, most reviews, responses, and actions have been halted. This political uncertainty has cast a shadow over the SEC’s efforts to advance the blockchain-based stock trading plan.

From a technical standpoint, blockchain-based stock trading requires the construction of a new type of market infrastructure. This includes systems for the issuance, trading, settlement, and custody of digital securities, as well as interoperability with traditional financial systems. Blockchain platforms focused on the tokenization of real-world assets, such as Plume Network, have obtained SEC approval to become registered transfer agents and will manage digital securities and shareholder records directly on-chain. The gradual improvement of such infrastructure has laid a technical foundation for blockchain-based stock trading.

Regardless of the final outcome, the integration of traditional finance and the blockchain world has accelerated. The evolutionary path of financial markets has never been determined by a single technology or policy, but rather shaped by the combination of technology, regulation, and market demand. Blockchain-based stock trading is just a microcosm of this transformation—and the real revolution has only just begun.