U.S. SEC Commissioner Mark Uyeda recently suggested that tokenizing securities could soon be a practical necessity for efficient markets. The Commissioner, however, notes that tokenization requires continued engagement with market participants and thoughtful evaluation of trade-offs among alternative approaches.
According to Uyeda, Capital markets can operate in ways that reduce “friction” and serve investors even better than before through improved price discovery if financial regulators navigate this process appropriately. The Commission can approach these changes methodically by strengthening market infrastructure to ensure U.S. capital markets continue to serve both investors and the broader economy.
Uyeda also emphasized that the Commission’s recent public notice of an exemptive application under the Investment Company Act stresses how fast tokenization is shifting from a theoretical exercise to reality. He added that this milestone is evidence of the Commission’s commitment to innovation without compromising custody, disclosure, and investor protection standards when assets are tokenized on-chain.
Uyeda hopes for fair, orderly, and efficient tokenized securities markets
The Commissioner further asserted that by moving forward with such applications, the agency is signaling its openness to this “modernization,” provided it adheres to longstanding regulations governing the achievement of the objectives of securities markets. Tokenization can help modernize capital markets by making ownership more visible and speeding up settlements.
According to the Commissioner, tokenization addresses current challenges in corporate actions and shareholder identification. He also notes that the Commission needs to continually find ways to incorporate speed and visibility into tokenized securities markets. The agency recently said that tokenized securities will remain securities under U.S. law, even if classified otherwise in crypto-ledger systems, according to Cryptopolitan.
Meanwhile, Uyeda implies that the agency has literally (almost) become a toothless watchdog under President Donald Trump. He states that the U.S. SEC’s engagement efforts have been limited to staff statements, roundtables, and public comment files. Under the Trump administration, the U.S. SEC has stopped using enforcement primarily to exercise its authority and express views on new developments. In that sense, Uyeda believes that the agency has returned to providing sub-regulatory guidance and exploring exemptive relief to allow limited-scope Commission action.
Coinbase CEO believes tokenized securities will soon go mainstream
Coinbase CEO Brian Armstrong recently emphasized that tokenized securities could soon become the norm, noting that most processes can be automated. According to Armstrong, tokenization is not necessarily a “scary technology,” but rather a better way to digitize and transfer value across capital markets. He adds that the convenience can be cost-effective over time because traders can access all asset classes, including tokenized securities, under familiar platforms.
The Coinbase CEO also pointed out that tokenized stocks will soon be “huge” when the wave of blockchain-based versions of traditional stocks becomes available to traders 24/7. Coinbase has been urging regulators to consider including tokenized securities as trading products since 2021, arguing that blockchains can move stocks faster than traditional rails.
Meanwhile, platforms like Circle, Superstate, Ondo Finance, and Securitize are leading the way in bringing simplified, digitized forms of U.S. government bonds onto the blockchain. Token Terminal data shows that the market cap of tokenized U.S. Treasuries has surpassed $10 billion.
Ondo Finance recently encouraged the U.S. SEC to support multiple tokenization models to expand access to existing pathways in the U.S. market structure, while preserving investor choice. The Commission’s Chair, Paul Atkins, and Commissioner Hester Pierce responded by discussing how the agency should approach tokenization across direct, intermediate, and wrapped models. Ondo believes the world is aligning around tokenization and that 2026 could be the year of tokenization.
Source: https://www.cryptopolitan.com/sec-must-clear-path-for-tokenization/
