Blockchain technology has the potential to enable “a broad swath of novel use cases for securities” and encourage “new kinds of market activities that many of the Commission’s legacy rules and regulations do not contemplate today, ” stated Securities and Exchange Commission (SEC) Chairman Paul Atkins. In his keynote speech at the Commission’s May 12 roundtable on tokenization and digital assets, Atkins announced the arrival of “a new day at the SEC, ” emphasizing that “policymaking will no longer result from ad hoc enforcement actions. Instead, the Commission will employ its existing rulemaking, interpretive, and exemptive powers to establish fit-for-purpose standards for market participants. ” One of the main objectives will be to “develop a rational regulatory framework for crypto asset markets that provides clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to deter bad actors from breaking the law. ” Specifically, Atkins highlighted the SEC’s focus on setting “clear and sensible guidelines” for crypto assets that may qualify as securities. Another priority involves enabling brokers to offer a wider array of investment products on their platforms, which in some instances could be a combination of securities and non-securities. This approach marks a shift from the policies of former SEC Chair Gary Gensler, whose leadership was criticized by some industry stakeholders for relying heavily on “regulation by enforcement” as an oversight strategy. Evolution of Securities Atkins compared securities tokenization to the evolution of audio formats — moving from vinyl records to cassettes to digital software — emphasizing how each transition improved compatibility and interoperability across many devices and applications. This evolution eventually paved the way for streaming content business models, which he noted “greatly benefited consumers and the American economy. ” The topic of securities tokenization continues to be a significant intersection between traditional finance and the crypto world. Several asset management firms, including BlackRock and Franklin Templeton, have already engaged in tokenization through their BUIDL and BENJI tokenized U. S. treasury funds.

Additionally, Robinhood is exploring creating a blockchain to enable European retail investors to trade tokenized U. S. securities. Tokenized securities may appeal to firms and brokerages because they offer advantages such as faster settlement times, reduced dependency on traditional financial infrastructure, and enhanced accessibility. Furthermore, tokenization can potentially improve liquidity for asset classes that have historically been illiquid. Based on data from RWA. xyz, $22. 6 billion worth of real-world assets are currently on-chain, representing a 7. 6% increase in the past 30 days. This figure excludes stablecoins, which are often backed by real-world assets such as treasury bills. As of May 12, stablecoins have a market capitalization of $243 billion according to DefiLlama data, with Tether’s USDt (USDT) alone accounting for $150. 6 billion.