The SEC has recently revealed more details on its proposed “innovation exemption” for crypto and tokenized assets as part of its broader 2026 regulatory agenda under Project Crypto.
In remarks delivered jointly with Commissioner Hester Peirce, SEC Chair Paul Atkins outlined the exemption as a temporary, conditional relief measure. It aims to enable limited trading of certain tokenized securities on novel platforms (e.g., those using automated market makers or blockchain-based systems), while the agency develops longer-term rules. Key features include: Volume caps on trading to control scale and risk. White-listing processes for buyers and sellers.
Relief from certain registration or other requirements that may not fit blockchain tech. A “sandbox”-like structure for experimentation by both traditional finance (TradFi) firms and crypto-native players. The goal is to gather data and inform permanent regulations, with an “exit ramp” for participants to transition to full compliance.
This builds on earlier 2025 announcements where Atkins indicated a January 2026 rollout (delayed slightly), and it ties into coordination with the CFTC. The exemption supports innovation in areas like tokenized equities without fully bypassing investor protections, though groups like traditional stock exchanges have raised concerns about potential risks to market integrity.
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This comes amid related SEC moves, such as recent guidance reducing broker-dealer net capital haircuts on qualifying payment stablecoins from 100% to 2% aligning them closer to money market funds.
Separately, talks at the White House on stablecoin yield and rewards progressed in a third closed-door meeting on February 19, 2026 involving banks, crypto firms and administration officials. Progress was reported as “constructive,” with incremental advances toward compromise on the contentious issue blocking broader digital asset market structure legislation tied to the CLARITY Act.
No final deal emerged, but the White House appears to favor allowing some limited stablecoin rewards; tied to transactions or activities, not passive holding like interest, rather than a full ban pushed by banks who argue yield-bearing stablecoins threaten traditional deposits.
A draft from White House Crypto Council reportedly proposes “narrow in scope” restrictions, with potential heavy penalties up to $500K daily for evasion. The White House set a March 1, 2026 deadline to resolve this impasse and advance the bill—failure could stall progress.
The core dispute remains whether stablecoins can offer rewards without being treated like bank deposits, with banks seeking stronger curbs and crypto sides pushing for flexibility. These developments signal ongoing momentum in U.S. crypto policy under the current administration, balancing innovation with safeguards—though key hurdles persist on both fronts.
A compromise permitting some incentives could enhance competitiveness, user adoption, and revenue models like transaction-based cashback or rebates. This might strengthen U.S.-based stablecoins’ global position, unlock innovation in payments/liquidity, and support ecosystems like XRP/RLUSD. Full bans would limit utility and push activity offshore.
Banks strongly oppose broad yields, viewing them as competitive threats that could drain deposits, reduce lending capacity, and create regulatory arbitrage. Limited/transaction-tied rewards represent a potential middle ground, but unresolved disputes risk prolonged uncertainty, delaying the CLARITY Act and maintaining the current “flow freeze” for institutional capital.
the White House’s third closed-door meeting showed constructive progress but no final resolution on the key impasse blocking the CLARITY Act (broader digital asset market structure legislation). The administration leans toward allowing limited, narrow rewards tied to transactions, activities, or usage rather than passive holding/interest-like yields on idle balances), with heavy penalties proposed for evasion.