Beyond the Innovation Exemption: Your Passage to In-App Tokenized Equities

Your app could become the place users buy real tokenized equities, trade onchain, and borrow against their investments. The infrastructure is already there, and the regulatory path just took a major step forward (you can see our legal deep dive on the new exemption here). 

On September 17, the SEC granted five years of conditional regulatory relief allowing real tokenized U.S. stocks to trade onchain without traditional exchange registration. Paired with safe harbor protections for developer front-ends and non-custodial wallets, Web3 teams and fintech platforms can now legally embed U.S. stock trading into their apps. 

But a regulatory path does not create a seamless product experience.

There are limits to the types of equities that can be traded onchain under the Innovation Exemption. The shares must carry the same rights as the underlying stock, including applicable voting rights and dividends. More importantly, the assets themselves or the trading venues need a way to establish permissions for who can hold it and which wallets can transact. 

The basic underlying concept under the entire exemption is onchain allowlists and ownership records. The investor owns the actual share, not a representation of its economic value. Therefore, someone needs to maintain a registry of actual owners, including mapping identity for the assets to wallets.  

Tokenization platforms like Superstate and Securitize already work within this model of direct ownership, while other synthetic assets like xStocks, Coinbase Tokenized Stocks or Binance Stocks likely fall outside the scope of this exemption. 

However, it’s this precise combination of offchain ownership with permissionless trading, swaps, and transfers that creates the natural tension to a seamless DeFi and non-custodial experience.  

Users want to discover an investment, qualify, purchase with stablecoins, trade through a supported venue, and borrow against the holding. Even if you already support Uniswap or Aave pool, you won’t be able to natively support these protocols and assets without either a) redirecting your user to the tokenization platform for onboarding or b) building out novel business relationships, compliance workflows, and smart contract integrations. 

And you’ll have to do this for each issuer platform, from Superstate to Securitize to Wisdomtree and beyond..

Passage eliminates the remaining UX fragmentation by unifying onboarding, eligibility verification, and wallet authorization into a single, cohesive infrastructure that can be combined with swaping, lending, or any DeFi activity. By embedding Passage, applications can qualify users and register their wallets on issuer allowlists natively, maintaining full control over the customer relationship. 

Passage already solves this onboarding challenge with Superstate. Partner apps can qualify users and register their wallets on Superstate’s allowlist within their existing product experience. Eligible users can then trade or contribute liquidity for supported assets through Uniswap’s v4 permissioned pools, which enforce the allowlist when they transact. Our Superstate integration also provides infrastructure for purchasing newly issued shares with stablecoins through Opening Bell and in the future will support other DeFi functionality like Aave.

Your app owns the entire user journey with no redirects and full functionality to the entire universe of tokenized equities available to a global audience, including the U.S. investors, in an entirely self-custodial model.  

Beyond Superstate, Securitize and WisdomTree are also on our roadmap for asset partners. Both of these platforms support direct ownership assets supported by the Innovation Exemption. These upcoming Passage integrations are intended to expand the investment opportunities partners can offer through a common integration. Their platforms span tokenized equities, institutional funds, money market products and other investments. 

Every new asset provider will expand what your app can offer, without adding complexity or forcing your team to rebuild the customer journey from scratch. 

That is the advantage of Passage. One integration connects your platform to a growing network of supported issuers and assets, with common onboarding, eligibility and wallet authorization, swapping, and DeFi workflows. As we add connections and capabilities, your product can grow alongside the network.

Your users get a consistent experience. Your team gets more time to build. Your app keeps the customer relationship.

The next generation of financial products will reach users through the apps they already trust. Build that access with Passage.

–

Want to offer tokenized assets in your own product? See how Passage works.