WASHINGTON — The U.S. Securities and Exchange Commission is advancing work on a regulatory framework to facilitate blockchain-based offerings of traditional securities, officials said on Friday.
The initiative focuses on tokenized securities, in which ownership of stocks or other assets is recorded on distributed ledger technology. SEC staff from multiple divisions have been developing guidance and potential exemptions to address compliance challenges while maintaining investor protections, according to agency statements and reports.
Tokenized securities are subject to existing federal securities laws, the SEC has stated. The agency issued guidance in January clarifying the application of those laws to assets represented on blockchains.
SEC Chair Paul Atkins has directed staff to explore an "innovation exemption" and other measures to support tokenization of equities and debt, aiming to bring such activity onshore and reduce regulatory uncertainty, sources familiar with the matter told media outlets.
"Tokenization has the potential to increase efficiency in capital markets," Atkins said in earlier remarks, though specific details of the latest policy preparations were not immediately released.
Industry participants have pushed for clearer rules on issuing, trading and settling tokenized securities. Nasdaq and other market operators have filed proposed rule changes with the SEC to enable trading of securities in tokenized form, with comments from groups such as the Securities Industry and Financial Markets Association.
Critics, including some traditional market participants, have raised concerns about potential risks including custody, settlement finality and market manipulation. Details on how any new framework would address those issues remain unclear.
The developments follow broader U.S. regulatory shifts on digital assets after 2024, including interpretations distinguishing certain crypto assets from securities and efforts to modernize rules for on-chain activities.
As of Friday, the SEC had not published a formal proposal or timeline for finalizing the blockchain-related policy measures. Market participants are expected to continue submitting comments and engaging with the agency on tokenization initiatives.
