SEC Weighs Plan to Allow Blockchain-Based Stock Trading Amid Crypto Push

U.S. regulators are considering whether blockchain-based stock trading might one day become part of Wall Street’s core infrastructure, in what could mark a new chapter in market mechanics. The Securities and Exchange Commission (SEC) has begun reviewing frameworks for distributed ledger settlement of equities, people familiar with the matter said.

The review comes just months after the U.S. moved to a T+1 cycle, or one-day settlement, and as digital asset adoption accelerates. Officials stress that no decision is imminent. Nevertheless, the conversation underscores how blockchain stock trading is edging from concept into policy debate.

SEC Explores Blockchain Shift in Market Infrastructure

For decades, clearing and settlement have flowed through the Depository Trust & Clearing Corporation. A blockchain model would replace that centralized record with a distributed ledger, updated in near real time and accessible to multiple parties.

Would such a shift cut costs, or would it introduce new points of failure? After all, that is the dilemma regulators now face.

An SEC staffer, speaking on condition of anonymity, said the agency is “examining pilot paths and limited-use cases” but insisted that investor protection remains the anchor. Importantly, the official added: “The technology shows promise, but scale and reliability must be proven.”

SEC EYES BLOCKCHAIN STOCKS!! 🔥

The SEC plans to allow stock trading on blockchain.

THIS COULD BE THE BIG ONE, BOYS!!! pic.twitter.com/U7OrbOPjKw

— Kyle Chassé / DD🐸 (@kyle_chasse) September 30, 2025

Push for Faster Settlement Aligns With Crypto Momentum

The discussion reflects a broader momentum. Bitcoin and ether exchange-traded funds now trade billions daily. Broker-dealers are experimenting with tokenized assets. Moreover, crypto infrastructure is slowly crossing into regulated markets.

Yet regulators are cautious. In fact, the shift from two-day to one-day settlement was only finalized this year. “We cannot risk destabilizing a reliable system simply to showcase novelty,” said Charles Whitehead, a Cornell Law School professor. Still, he conceded, “if blockchain rails can be secured, they may represent the logical next step.”

Industry Voices Caution on Oversight and Risk

Advocates argue that distributed ledgers could trim reconciliation layers and shrink operational expenses. However, detractors counter that weaving decentralized systems into Wall Street’s machinery may complicate supervision rather than simplify it.

“Every market innovation brings both efficiency and exposure,” said Sheila Warren, chief executive of the Crypto Council for Innovation, in an interview with CoinDesk. “Cybersecurity, governance, and manipulation risk all need to be addressed up front.”

A hedge fund manager put it more bluntly: “If a ledger fails, the entire market asks who eats the loss. In other words, redundancy is not optional when you are moving trillions.”

How Would Blockchain Trading Affect Wall Street?

The structural consequences could be far-reaching. Clearinghouses might morph into ledger validators. Broker-dealers could plug directly into distributed networks. Exchanges may need to retool order routing to match the new architecture.

Short sentence here. At the same time, migrating infrastructure and retraining compliance systems could carry hefty costs. One strategist compared the overhaul to the transition from paper slips to electronic trading in the 1970s. It may prove a generational shift rather than a quick fix.

Analysts See Opportunities but Flag Major Uncertainties

To crypto advocates, the SEC’s interest signals blockchain’s reach may extend well beyond token speculation. Consequently, they argue the same rails could unlock faster settlement across stocks, bonds, and other traditional instruments.

Still, the hurdles are obvious. For example, could different ledgers ever interconnect smoothly? Can regulators keep their line of sight over trading activity? And would investors tolerate a freeze triggered by a single code error? These are not trivial questions.

Rajeev Patel, a market structure strategist at KPMG, summed it up: “The assumption that blockchain equals cost savings is untested. As a result, it could take years of experiments before confidence builds.”

What Comes Next for SEC’s Review?

The SEC has not published a proposal. Observers expect either a concept release or request for comment later this year. If so, limited pilots could follow, with tightly defined securities or small participant groups.

For now, regulators emphasize that the pace will be deliberate. Nevertheless, the fact the agency is even weighing blockchain settlement reflects how digital rails, once confined to crypto circles, are becoming part of mainstream market policy.

For retail readers, one parallel stands out: crypto platforms already use blockchain for trading. Therefore, the SEC’s exploration hints at a future where the same rails might one day underpin stocks.

Recap: Key Points for Readers

• The SEC is reviewing whether blockchain could handle U.S. stock settlement.
• Officials caution that no approval is near, yet discussions are quickening.
• Efficiency is the pitch; however, oversight, cyber risks, and governance are the worries.
• Brokers, clearinghouses, and exchanges may need to rethink their roles.
• A concept release or test program could emerge within months.