SEC Allows Direct Trading Between Security Tokens and Bitcoin—How Will Wall Street Capital Move?

▲ Bitcoin (BTC), Wall Street/ChatGPT-generated image

The U.S. Securities and Exchange Commission (SEC) has announced groundbreaking guidance allowing direct trading between security tokens (STs) and Bitcoin (BTC), marking the beginning of a full integration between digital assets and traditional finance.

According to crypto-focused media outlet The Crypto Basic on Feb. 20 (local time), the SEC released new guidance permitting security tokens to form direct trading pairs with digital assets such as Bitcoin. The measure is regarded as a key achievement of “Project Crypto,” launched under SEC Chair Paul Atkins, who is known for his crypto-friendly stance.

This guidance, which elaborates on the SEC’s statement on security tokens issued on Jan. 28, opens the door for tokenized assets to be exchanged directly for Bitcoin or stablecoins in an on-chain environment. Previously, securities transactions were required to involve cash, but now direct settlement between assets within blockchain infrastructure is possible. Chair Atkins emphasized a shift in regulatory paradigm, stating, “Most digital assets are not securities, and technological form cannot precede legal regulation.”

The new guidance is expected to be linked with the Depository Trust Company’s (DTC) ongoing securities tokenization pilot program, which is set to begin full-scale operations in the second half of 2026. Nasdaq has also submitted proposed rule changes to support trading of tokenized securities on its exchange, signaling swift action from established financial institutions. If the U.S. crypto market structure bill, known as CLARITY, is passed, integration between security tokens and digital asset exchanges is likely to accelerate further.

Market participants expect the move to serve as a catalyst for significantly increasing liquidity in major assets such as spot Ethereum ETFs and XRP. Institutional investors will be able to purchase security tokens using Bitcoin as collateral or sell tokenized shares and immediately convert them into Bitcoin, enabling more strategic asset management. This development signals that digital assets are evolving beyond simple investment vehicles into a substantive financial settlement layer.

Ripple CEO Brad Garlinghouse welcomed the SEC’s decision and expressed his intention to accelerate real-world asset tokenization initiatives through the XRP Ledger. The crypto industry believes the guidance will bring an end to years of legal uncertainty between the SEC and market participants and serve as a decisive turning point for the United States to establish itself as a global hub for Web3 finance, while closely monitoring forthcoming detailed implementation guidelines.

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