U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins said tokenization technology could contribute to enabling 24-hour trading in U.S. equities and preventing naked short selling through real-time inventory management.
The SEC approved a “temporary conditional exemption (innovation exemption)” allowing limited trading of tokenized U.S. stocks in an on-chain environment.
In this regard, SEC Chair Paul Atkins said he believes U.S. capital markets are moving toward expanded 24-hour trading.
Chair Atkins said tokenization technology has the potential to provide practical support for implementing 24-hour trading in U.S. equities.
He further explained that the introduction of tokenization could enable real-time inventory management in the securities industry.
He emphasized that such management could improve trading efficiency and reduce settlement failures while mitigating the risk of malicious naked short selling.
He added that the ultimate goal is to eliminate the threat of naked short selling entirely through tokenization.
Chair Atkins said he had asked SEC staff to examine the steps needed to establish an environment conducive to market growth while harmonizing safeguards against harmful market activity.