Known as 'Crypto Mom,' SEC Commissioner Hester Peirce stated during an interview on August 13 that various models of asset tokenization will ultimately be tested by the market. She added that as long as tokenization operators ensure proper information disclosure and allow investors to clearly understand the nature of the assets, the SEC would be willing to cooperate with relevant operators.
Various tokenization models can be attempted, but operators must ensure proper information disclosure.
Peirce stated that the SEC maintains an open attitude toward various practices of asset tokenization and is willing to collaborate with operators taking different approaches to explore which models the market will accept.
However, Peirce also reminded that companies must fully disclose the nature of assets when promoting tokenization.
What are tokenized securities, and do they apply to securities laws?
Tokenized Securities are 'digital versions of securities' issued on the blockchain, which can be traded directly on-chain without going through traditional brokerage accounts. However, such tokens usually do not represent direct ownership of the underlying asset.
The advantage of tokenized securities is that they 'divide a stock or other asset into smaller units,' allowing retail investors to enter the market with small amounts of capital. At the same time, on-chain trading offers 24-hour trading without interruption, unlike traditional stock markets that have opening and closing hours.
According to previous reports, Peirce has stated that whether tokenized securities are directly issued by a company or launched by a third party, as long as their nature remains securities, they must comply with traditional securities laws.
Industry opinions are divided, ranging from proactive advancement to cautious observation.
Currently, US brokerage firm Robinhood is one of the most proactive operators in promoting tokenization, having announced earlier this year that it would allow some European users to start trading 'tokens representing US stocks.' Robinhood CEO Vlad Tenev also stated that this business is currently under discussion with regulatory authorities.
Despite some operators advancing optimistically, there are also operators taking a reserved attitude. For example, Citadel Securities, the largest designated market maker on the New York Stock Exchange, has warned about the potential for 'regulatory arbitrage' with tokenization. They believe that without clear regulations from the SEC, operators will find loopholes.
JPMorgan also noted that while the concept of tokenization is currently very popular, actual adoption remains low. According to JPMorgan's own analysts, the current global tokenization market size is only about $25 billion, most of which is driven by crypto operators, while traditional banks, brokerages, and publicly listed companies are participating at a relatively lower level.
This article is authorized for reprint from: (Chain News)
Original title: (Crypto Mom Peirce: SEC welcomes innovation in asset tokenization, but operators must ensure proper information disclosure)
Original author: Louis Lin
'Tokenized securities are still securities! Crypto Mom: SEC welcomes innovation, but operators must ensure proper information disclosure' was first published in 'Crypto City'