The SEC is considering a regulatory exemption aimed at encouraging the tokenization of real-world assets, signaling a shift toward more innovation-friendly policies under Chair Paul Atkins.
SEC Considers New Exemption to Foster Tokenization
The U.S. Securities and Exchange Commission is weighing a regulatory exemption to facilitate the growing interest in asset tokenization, according to Chair Paul Atkins. The move, described as an "innovation exception," would allow greater flexibility within the existing regulatory framework to support blockchain-based financial products.
Atkins emphasized that the agency’s staff is actively assessing changes that could incentivize tokenization initiatives. The shift comes amid growing institutional momentum toward digital securities and follows the House's passage of the GENIUS Act, a major stablecoin bill that Atkins praised as a critical step in providing regulatory clarity for the digital asset sector.
From Enforcement to Innovation: A Shift in SEC’s Crypto Strategy
Atkins’ leadership marks a stark departure from that of his predecessor, Gary Gensler. He has pledged to roll back several Gensler-era measures, including rules on digital asset custody. Calling for a modernized approach, Atkins has voiced support for a regulatory overhaul that gives crypto firms more flexibility in asset registration and custody management.
The SEC, under Atkins, is also expected to revisit the definition of “qualified custodians” and allow exemptions aligned with industry practices. In addition, revisions are likely for the rules governing special-purpose broker-dealers, enabling them to facilitate trading in both securities and non-securities.
Tokenization Viewed as ‘Inevitable’ by SEC Chair
Atkins suggested that asset tokenization is not just a possibility but an eventuality. “If it can be tokenized, it will be tokenized,” he stated, highlighting its potential to increase liquidity and transparency in capital markets. Several financial firms are already exploring tokenized versions of U.S. equities and private company shares.
By proposing regulatory accommodations, the SEC aims to foster a secure yet innovation-friendly environment for tokenized financial products.
Stablecoin Bill Gains Ground Despite Political Frictions
The SEC’s tokenization push follows the House’s approval of the GENIUS Act, which establishes federal guidelines for stablecoin issuers. The bill, seen as a landmark development, requires firms to maintain dollar-equivalent reserves in highly liquid, government-backed assets under regulatory oversight.
Though the legislation passed with bipartisan support, including over 100 Democratic votes, some lawmakers remain skeptical. Critics like Senator Elizabeth Warren argue the bill lacks sufficient consumer safeguards. Others have raised concerns over former President Donald Trump's extensive ties to crypto ventures, citing reports of his family's $620 million earnings from related projects.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice