SEC Considers Game-Changing Innovation Exemption to Turbocharge Asset Tokenization
The SEC just blinked—and crypto might never be the same.
Regulators are drafting what could become the holy grail for blockchain adoption: a sandbox exemption letting tradFi players experiment with tokenized assets without drowning in red tape. No more begging for no-action letters or sweating enforcement bullets.
Wall Street's Paper-Pushers Panic
Imagine BlackRock tokenizing REITs or JPMorgan slicing up bonds as NFTs—all with the SEC's temporary blessing. The 20th-century compliance brigade is already sharpening their knives (and billing hours).
This isn't charity. The agency knows tokenization could pump trillions into stale markets—they just want a controlled burn instead of a wildfire. Smart move after years of playing whack-a-mole with DeFi.
One cynical prediction? The exemption will require using 'approved' blockchains—probably the same ones banking lobbyists pre-loaded with KYC backdoors. Innovation, but make it corporate.
Either way, the dam's cracking. When the suits start racing to tokenize everything from private equity to parking meters, even Bitcoin maxis might crack a smile.
The SEC chair claimed that assets will eventually be tokenized
According to Atkins, they are exploring rule alterations to allow new trading methods and more targeted exemptions to support the development of a broader tokenized securities infrastructure.
Several financial institutions have already shown interest in tokenizing major US stocks, and some have even hinted at developing tokenized products of private firms. While the future remains uncertain, Atkins argued that shifting assets onto blockchain rails is clearly inevitable, adding, “So if it can be tokenized, it will be tokenized.”
He also talked about the recently approved stablecoin bill, hailing it as a “historic step” toward establishing the US as the global leader in crypto. He stated that he’s looking forward to seeing the market leverage the legislation provides while maintaining robust risk standards.
Other backers of the bill have claimed it could enable quicker, lower-cost payments and bring credibility to the $265 billion stablecoin industry, which Citigroup analysts estimate could balloon to $3.7 trillion by 2030. Still, some Democrats like Senator Elizabeth Warren argue the legislation doesn’t go far enough in shielding consumers.
House Democrats who opposed the bill cited concerns over President Trump’s involvement with crypto assets. According to Blomberg, Trump and his family have received $620 million from their crypto ventures, including the World Liberty Financial project, the TRUMP and MELANIA meme coins, and a 20% stake in American Bitcoin.
The bill, however, had over 100 democrats vote in favor of it. Emilie Choi, Coinbase’s President, even described it as a giant milestone to have massive bipartisan support to advance stablecoins and market structure. The legislation stipulates that firms will hold equivalent dollar reserves in short-term government bonds or similar assets subject to state or federal oversight. It is set to reach Trump’s desk before the end of the week, where he is expected to sign it into law.
Atkins had stated he would remove some of Gensler’s policies
Paul Atkins has charted a distinctly different course on crypto from his predecessor, Gary Gensler, who critics say tried to govern the sector through enforcement. Atkins has previously expressed his intention to unwind key Gensler-era policies, including the rule allowing brokers to act as digital asset custodians.
In May, he said the agency will make it easier to register crypto assets by clarifying securities rules. On custody, he said registrants should have more choices for managing and storing customer assets. He signaled the commission WOULD reexamine and define the criteria for “qualified custodians,” while also granting exemptions from current custody requirements to align with common practices in the industry.
Atkins also said the framework governing special-purpose broker-dealers is due for an overhaul. He supports allowing registered firms to trade a broader mix of securities and non-securities assets on their platforms.
He also emphasized that the agency should work on replacing the existing rules with ones that could last for years. Additionally, he claimed the SEC can proceed without waiting for Congress to approve laws.
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