The US Securities and Exchange Commission (SEC) took a step deeper into the regulatory debate around tokenisation at its fourth Crypto Task Force roundtable. While some commissioners pushed for clearer rules to enable blockchain-based securities markets, others voiced sharp reservations about the technology’s practical use and systemic impact.
Commissioner Paul S. Atkins argued that a shift from traditional “off-chain” processes to blockchain-based infrastructure demands new regulatory tools. He focused on three areas: issuance, custody, and trading. On issuance, he said current registration forms, like the S-1, are incompatible with crypto assets, calling for exemptions and safe harbours tailored to tokenised offerings.
He also called for expanded custody options, including self-custody, and a reworking of what qualifies as a “qualified custodian.” For trading, Atkins proposed updating the Alternative Trading System (ATS) rules and allowing broker-dealers to combine services, like securities and crypto trading, under unified platforms. Without these reforms, he warned, innovation could move offshore.
Tokenisation as evolution
Commissioner Hester Peirce framed tokenisation as a natural extension of digital market infrastructure. She emphasised that blockchain-based securities should be treated the same as traditional ones, arguing that the database used to record ownership should not change the regulatory approach. Smart contracts, she said, could open new ways for investors to use their assets, but current rules leave too much uncertainty.
Commissioner Caroline Crenshaw pushed back, questioning whether tokenisation solves any actual problems in market structure. She warned that moving core functions “on-chain” could destabilise important protections like netting and liquidity management. Instant settlement, often seen as a benefit, could actually undermine market resilience, she said. Crenshaw also challenged the assumption that public blockchains can scale to meet institutional requirements, and questioned the point of private ones.
Balancing innovation with safeguards
Commissioner Mark Uyeda acknowledged tokenisation’s potential to streamline issuance, trading, and record-keeping, especially for assets like real estate or intellectual property. But he stressed that regulation must evolve to offer clear compliance paths. Outdated tools, he warned, should not be allowed to block useful innovation, but nor should regulation chase every emerging use case.
This roundtable is part of the SEC’s Crypto Task Force roundtable series, click here for our coverage on earlier sessions.
