Hester Peirce Drops Truth Bomb: ‘Tokenized Securities = Securities’ – Will This Fuel or Freeze the Stock Tokenization Boom?

SEC Commissioner Hester Peirce just drew a line in the digital sand—her declaration that tokenized securities remain firmly under existing regulations sends shockwaves through crypto and TradFi circles alike.

Wall Street’s tokenization dreams meet regulatory reality

While blockchain purists groan at the reminder, institutional players might actually see this as a green light—clear rules mean fewer legal landmines for trillion-dollar balance sheets dipping into distributed ledgers. The irony? The same regulators who move at glacial speeds on spot BTC ETFs suddenly have crystal-clear clarity when it comes to protecting their securities turf.

Tokenization’s trillion-dollar paradox

Every BlackRock memo about ‘blockchain efficiency’ just collided with the SEC’s stone-cold mantra: dress up a security in digital threads, it’s still a security. The real test? Whether this statement accelerates institutional adoption (finally!) or gives C-suites another excuse to ‘wait and see’ while their competitors steal the march. Bonus jab: Nothing unites Wall Street and crypto like finding creative ways to pretend regulations don’t apply to them.

What does Hester Peirce say?

On July 9, 2025, as the tokenization of stocks became a topic of discussion, SEC crypto Task Force head Hester Peirce issued a statement on the SEC website. Her message, titled “Enchanting but not Magical,” was summarized by the media as: “tokenized securities are still securities.”

In her message, Peirce emphasized that tokenized securities qualify for existing securities laws. Blockchain does not transform securities into cryptocurrency or any other asset class. Therefore, securities laws apply to tokenized assets, and investors and issuers must recognize this to avoid risks.

Regarding “unique risks,” Peirce noted that some securities are tokenized by entities that didn’t issue them, or they tokenize security entitlements. Traders should be aware of such possibilities as they introduce counterparty risks, while distributors of tokenized securities must remember their disclosure obligations.

“While blockchain-based tokenization is new, the process of issuing an instrument representing a security is not. The same legal requirements apply to on- and off-chain versions of these instruments.”

At the end of her statement, Peirce calls on market participants to meet with SEC representatives to work together on creating a clear legal framework for tokenized securities trading.

Absolutely loving Hester’s leadership.

Rather than sue everyone, she writes a blog and everyone gets the message.

Respect. ✊🏼

The Biden-era SEC Chair, Gary Gensler, was known for considering most cryptocurrencies unlicensed securities, leading to multiple legal battles. Hester Peirce’s statement is markedly different. She reminds the public that the format of securities doesn’t change their legal essence. Gensler claimed altcoins are securities; Peirce says securities are securities.

Does Peirce’s statement represent the SEC’s position?

While Peirce’s comments are cautionary, SEC Chair Paul Atkins has made favorable statements about tokenized stocks. As reported by multiple media outlets, Atkins referred to tokenized securities as “innovation” and stated that the SEC should advance innovation in the marketplace.

SEC Chairman Paul Atkins: "Tokenization is an innovation, and we at the SEC should be focused on how do we advance innovation in the marketplace." pic.twitter.com/S9vd2cmIcr

He did say that, but Atkins is not suggesting current trading practices can remain unchanged. In the same interview, he noted that tokenized securities are not a new product type, but considers them beneficial for the market and seeks to adjust the rules accordingly. 

Overall, Atkins and Peirce are aligned, so Peirce’s statement fully matches the SEC chair’s vision.

What are the problems in the RWA markets?

Raising awareness among traders, market supervision, and rule adjustments are vital as there have been recent incidents in which companies denied involvement with tokenized securities traded or announced by marketplaces.

One such instance is OpenAI’s recent dismissal of Robinhood CEO Vlad Tenev’s public statement that tokenized OpenAI shares WOULD soon be tradable on Robinhood. Tenev later admitted that “stock tokens” traded on Robinhood do not qualify as OpenAI equity.

At our recent crypto event, we announced a limited Stock Token giveaway on OpenAI and SpaceX to eligible European customers. While it is true that they aren’t technically “equity” (you can see the precise dynamics in our Terms for those interested), the tokens effectively give…

What’s the future of tokenized stocks?

Robinhood’s Vlad Tenev has called for the tokenization of shares, believing it will empower retail investors to trade securities and benefit institutional traders as well. In a Bloomberg interview, he mentioned that the SEC is working with businesses, including Robinhood, to adjust rules for tokenized stocks.

“Tokenization is the biggest innovation to come to capital markets in the past decade.”

— Robinhood CEO, @vladtenev

He’s right. The future isn’t crypto vs traditional — it’s both, working together.

ACES is using tokenization to solve a real problem:

E-commerce liquidity. pic.twitter.com/itPhRtv7Au

In a recent memo, Bitwise CIO Matt Hougan outlined the prospects for the tokenized stock market. He estimates the total value of the global stock and bond markets at $257 trillion and predicts that LAYER 1 blockchains and marketplaces will compete for pieces of this emerging market. Hougan cites BlackRock CEO Larry Fink, who said: “Every stock, every bond, every fund, every asset, can be tokenized.”

Compared to the $257 trillion tokenized stock market, the estimated $2 trillion stablecoin market expected by 2030 is barely visible. Hougan believes tokenization can develop quickly, and says modern-day stock token investors are “very early.”

“I still think it will take more than a decade before the majority of stock and bond trading happens on-chain. But with major financial firms like Robinhood and Tradeweb positioning themselves for the transition today, I’ve started to wonder: Could tokenization achieve 1-5% penetration in a few years? Could a dozen major pilot projects lift us to that level of market penetration? It seems possible, and it would translate into trillions of dollars … more than any other crypto application or asset, including Bitcoin.”