The SEC’s framework for trading stocks via automated market makers (AMMs) enables around-the-clock trading, provided there are sufficient assets in the liquidity pools. However, experts like Noch caution that constant trading may not yield better outcomes due to the potential for poor pricing amid thin liquidity.
The SEC has implemented stringent regulations for this approach, mandating that tokens represent National Market System (NMS) stocks and maintain the associated rights such as dividends and voting. Companies must also be informed about any tokenization of their stocks and have the right to object within 30 days. Additionally, trading volumes are limited, leading some experts to suggest that the U.S. model may face challenges compared to international tokenized stock offerings.
Furthermore, interest from issuers in tokenizing their stocks appears to be low, even among companies focused on retail. The example of Figure illustrates this issue: despite offering both blockchain-based and traditional stock shares, 99.9% of its trading volume occurred through conventional listing, signaling a significant hurdle for broader adoption of tokenized stocks in the U.S.
