Tokenized Securities
Tokenized securities (also called "digital securities") are financial instruments – such as stocks, bonds, or fund interests – that are formatted as or represented by a crypto asset recorded on a blockchain or similar distributed ledger.
Common examples of tokenized securities include:
- Tokenized stocks or equity interests in a company
- Tokenized bonds or debt instruments
- Tokenized fund shares, including money market or real estate funds
There are different models tokenizing securities:
Issuer-sponsored Tokenized Securities. The company itself (or its agent) issues the security directly on a blockchain. In this model, the security carries the same legal rights – voting, dividends, ownership – as a traditional share of the same class. Note, however, that a tokenized security could be of a different class of securities from those issued in traditional form.
Custodial Tokenized Securities: In this model, the token represents the token holder’s indirect interest in the underlying security via a security entitlement. The token holder receives the same rights, obligations, and benefits as a traditional shareholder. Essentially, holding the token is the equivalent of holding the underlying security through a securities intermediary like a broker-dealer.
Synthetic Tokenized Securities: In this model, a third party may tokenize a security issued by another person by issuing a linked security or derivative that provides synthetic exposure to a referenced security. Under this model, the price of the tokenized security changes with the price of the referenced security, but the investor has no claims or rights against the issuer of the referenced security. The rights, obligations and benefits received by the token holder of a synthetic tokenized security may differ significantly from those of a traditional owner in the underlying security.
On March 17, 2026, the Securities and Exchange Commission (“Commission” or “SEC”) issued an interpretive release to provide greater clarity on the SEC’s treatment of crypto assets under the federal securities laws. According to this interpretation, tokenized securities are securities and are subject to SEC regulation and investor protections.
The SEC’s interpretive release distinguishes among:
Digital Securities: Tokenized traditional financial instruments (stocks, bonds, fund interests). These ARE securities and are subject to SEC regulation and investor protections.
Digital Commodities: Crypto assets like bitcoin or ether that derive value from their associated blockchain networks and supply and demand, not from a company's performance. These ARE NOT securities and ARE NOT subject to SEC regulation and investor protections.
Digital Collectibles: Crypto assets that are designed to be collected and/or used and may represent or convey rights to artwork, music, trading cards, in-game items, or digital representations or references to internet memes, characters, current events, or trends, among other things. These ARE NOT securities and ARE NOT subject to SEC regulation and investor protections.
Digital Tools: Crypto assets that perform a practical function, such as a membership, ticket, credential, title instrument, or identity badge. These ARE NOT securities and ARE NOT subject to SEC regulation and investor protections.
Stablecoins: Stablecoins as defined in the GENIUS ACT are a “payment stablecoin issued by a permitted payment stablecoin issuer.” These ARE NOT securities and ARE NOT subject to SEC regulation and investor protections.
IMPORTANT: Although the SEC’s interpretive release identifies digital commodities, digital collectibles and digital tools as non-securities, it also notes that any such asset may still be offered or sold through an investment contract, which is itself a security.
For additional information on tokenized securities please read:
SEC’s Statement on Tokenized Securities
SEC’s Office of the Advocate for Small Business Capital Formation Building Blocks “Crypto Assets and the Federal Securities Laws”
SEC’s Office of the Advocate for Small Business Capital Formation Building Blocks “Transactions Involving Crypto Assets”
The content of this webpage represents the views of the staff of the Office of Investor Education and Assistance. This content is not a rule, regulation, or statement of the Commission. The Commission has neither approved nor disapproved the content of this webpage. The content of this webpage, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person.
