Goldman Sachs is pessimistic about demand for tokenized stocks: the SEC’s new rules provide a license, but not the market

Introduction
On September 17, 2026, the U.S. Securities and Exchange Commission (SEC) issued its Innovation Exemption under Commission File No. 34-106402, opening a five-year regulatory loophole for on-chain trading of tokenized stocks. Under the exemption, qualified “tokenized securities trading venues” (TSVs) can be exempt from being deemed a statutory “exchange,” and liquidity providers can also be exempt from having to register as market makers. From the text of the rule itself, this appears to be a rare concession by the regulator. But a Goldman Sachs analyst’s assessment is relatively level-headed: in the first phase after the exemption takes effect, it is unlikely to divert a large volume of trades away from Nasdaq or the Intercontinental Exchange Group (ICE), the parent company of the New York Stock Exchange.
Demand is being discounted not because of the regulator’s attitude, but because of the rules themselves. In its exemptions, the SEC also set constraints including a cap on the number of underlying assets, a ceiling on trading volume, limits tied to issuer veto rights, and market-structure constraints for AMMs. Taken together, these provisions make tokenized stocks look more like a controlled experiment than a substitute for the traditional stock trading system. For trading platforms, market makers, and institutional investors, the real question has shifted from “can we do it?” to “is it worth doing?”
What the SEC gave, and what it withheld
(The innovation exemption) applies to a very specific category: tokenized NMS stocks traded in permissioned automated market maker (AMM) liquidity pools. The SEC explicitly excluded synthetic tokens that provide only price exposure, and required that the token must convey to holders the same company rights as a traditional, comparable stock, including corporate rights, dividends, voting rights, and liquidation rights. This means Robinhood’s overseas-issued stock tokens—legal structure: tokenized debt securities issued by Robinhood Assets (Jersey) Limited, whose holders do not enjoy the issuer company’s legal or beneficial rights—do not fit this new framework and would require additional product development to enter the U.S. market.
More importantly are the quantity and liquidity constraints. According to the exemption documents, in the first tier (S&P 500 and Russell 1000 constituent stocks plus some high-transaction ETPs), each TSV can list up to 75 underlying assets, and the trading volume of any single underlying must not exceed 0.25% of that stock’s prior month average daily trading volume (ADV). The second-tier cap is 250 underlying assets, at 2.5% ADV. If trading volume limits are repeatedly breached, the trading venue and related TSV must suspend trading of that tokenized stock for three months. In addition, third-party tokenized stocks require at least 30 calendar days’ advance notice to the issuer; if the issuer objects, it cannot be listed.
The direct effect of these provisions is that the scale of tokenized stocks is locked within a range that “will not disturb the main market.” Goldman Sachs analysts pointed out that the trading volume ceiling, underlying asset limits, issuer veto rights, and AMM market structure collectively constrain how much this experiment can impact traditional exchanges. The SEC’s design intent is clear: to leave room for innovation while preventing on-chain liquidity pools from interfering with price discovery mechanisms in centralized markets.
Why investment banks think demand is limited
Investment banks’ cautious assessment is built on three layers of logic.
First, the liquidity ceiling compresses the space for arbitrage and market making. A 0.25% ADV cap means that even for the most liquid stocks like Apple and Nvidia, the daily trading volume of their tokenized versions is limited to a very small range. For market makers, the captured trading fees are limited and cannot cover the fixed costs of developing compliant AMM infrastructure. For arbitrageurs, once they hit the cap they must stop trading for three months, severely reducing strategy executability. The more constrained liquidity becomes, the harder bid-ask spreads are to converge; in turn, this suppresses trading willingness, creating a negative feedback loop.
Second, issuer veto rights increase supply uncertainty. In early September 2026, AMC Entertainment CEO Adam Aron publicly criticized Robinhood for issuing AMC-related tokens without the company’s consent—an episode that serves as a real-world footnote to the SEC’s 30-day notice period. For issuing companies, veto rights are tools to protect the shareholder structure and brand control; but for trading platforms, this means the listing schedule and even the target pools are in the hands of the issuers, making it difficult to form a predictable product matrix. Unless issuers’ stance clearly shifts toward caution, it is hard for trading platforms to roll out the proposed target pools at scale.
Third, the AMM structure does not match institutional trading habits. The SEC exemption this time is aimed at AMM liquidity pools, not traditional limit-order books. Goldman Sachs noted that if Coinbase wants to run its own U.S. TSV, it would need to develop AMM infrastructure, or route traffic to qualifying decentralized trading venues. For traditional capital accustomed to centralized order books, deep quotes, and institutional-grade execution algorithms, AMMs’ slippage and lack of predictability remain hurdles. Especially under the condition that trading volume is capped, liquidity providers lack sufficient incentives to provide deep market making. 
Who may benefit, and who needs to “catch up”
Although overall demand is being discounted, Goldman Sachs and Citizens analysts still named three companies that may benefit, but the rationale for the potential benefits differs.
Coinbase is seen as the most complete infrastructure provider: its international tokenized stocks are backed 1:1 by real stocks held in regulated, bankruptcy-remote custody; dividend rights have already been implemented, and voting rights are being developed. Coinbase President Emilie Choi said at the Goldman Sachs Communacopia conference that implementing voting functionality is a technical task, not a fundamental change in securities structure. However, Coinbase’s existing exchange uses a centralized limit-order book, which does not fully align with the AMM pools covered by the SEC exemptions; infrastructure adjustments are still needed.
Robinhood is facing a compliance “catch-up.” The overseas stock tokens it offers provide a derivative-style price exposure and do not meet the SEC’s requirements for shareholder rights. Citizens analysts expect Robinhood to move quickly, citing its accumulated business experience in overseas tokenized stocks and the Arbitrum-based Robinhood Chain initiative; however, product restructuring will still take time.
Circle’s benefit lies in the settlement layer. As tokenized securities activities expand, USDC is expected to see increased usage in settlement and collateral scenarios. USDC already serves as a dollar settlement layer in some on-chain applications, supporting tokenized stocks, crypto assets, and prediction markets.
Worth comparing is that on-chain demand is already happening, but at a small scale. Token Terminal data shows that, as of the 30 days ending September 12, 2026, the tokenized stock DEX trading volume on Coinbase Base was $730.9 million, with Aerodrome accounting for $557.1 million. Morpho then enabled lending for five types of stock tokens issued by Coinbase; as of September 18, collateral was about $104,400 and borrowed about $547,000 USDC. These figures suggest ecosystem tools are catching up, but relative to the U.S. stock market’s daily trading volume at the trillion-dollar scale, tokenized stocks remain on the margins.
This is not a final outcome—it’s a five-year experiment
It’s important to emphasize that (the innovation exemption) is a temporary, conditional remedy effective until September 17, 2031. In its filing, the SEC clearly stated that this is to allow TSVs to trade first in a permitted environment while the Commission considers whether additional rulemaking is necessary. In other words, the next five years are an observation period, not a final verdict. In a statement, SEC Chair Paul Atkins said the exemption is intended to address the challenge of “hindering the landing of responsible innovation in the U.S.,” while also providing investor protection and market integrity standards.
Traditional market infrastructure is also advancing another tokenization path in parallel. DTC’s tokenization service plan within DTCC is scheduled to launch in October 2026, with participants including Circle, Coinbase, Goldman Sachs, BlackRock, Bank of America, and more than 50 other financial institutions. The New York Stock Exchange rule change, SR-NYSE-2026-17, was approved by the SEC in April 2026 and became effective immediately. These two paths offer contrast with the SEC’s AMM exemption: the former relies on existing custody and settlement systems, while the latter attempts to rebuild the trading mechanism on public chains.
For the industry, the real issue is not whether “regulation is loosened,” but whether the loosened scale can incubate real demand. If trading volume caps and issuer veto rights do not loosen for the long term, tokenized stocks may remain stuck in marginal liquidity pools for years. If within five years data proves that tokenized stocks are harmless to price discovery, settlement efficiency, and investor protection, then permanent rules may follow. In the coming quarters, three points should be prioritized: the number of approved TSVs and the composition of their underlying pools, the actual utilization rate of trading volume caps for each underlying, and how frequently issuers exercise veto rights. These indicators will determine whether tokenized stocks move from a “controlled experiment” to “mainstream supplementation,” or remain in a regulatory sandbox long term.