US SEC signals major shift in crypto regulations, Commissioner Peirce confirms potential impact on tokenization.
The US Securities and Exchange Commission (SEC) is evaluating a proposal enabling companies to participate in tokenization by issuing and trading securities using blockchain technology. This consideration is based on a recent statement from SEC Commissioner Hester Peirce, who has consistently argued for more flexible and transparent crypto regulation.
The Tokenization Bid and the US SEC
In a recent post on X, Wu Blockchain disclosed that Commissioner Peirce has disclosed that the SEC is contemplating an exemption order for tokenization. This exemption would offer companies legal protection when employing distributed ledger technology (DLT) to issue, trade, and settle securities.
She emphasized the necessity for the US SEC to refrain from establishing regulations that impede innovation in a public statement. This is especially crucial in situations where technology can potentially enhance the efficacy of capital markets.
Peirce posited that the tokenization exemption could permit the utilization of trading systems designed explicitly for securities. She emphasized that the current regulations may impede innovation and advocated for a principle-based approach that prioritizes investor protection and long-term value creation, rather than rigorous procedural requirements.
The upcoming roundtable discussion on tokenization, scheduled for next week, is preceded by this most recent update. The Commission aims to collect public input on how blockchain can be incorporated into the financial system without jeopardizing market integrity.
The Securities and Exchange Commission has granted a concession regarding cryptocurrency lawsuits
In the past few months, the US Securities and Exchange Commission (SEC) has demonstrated indications of a shift in its position regarding specific legal issues related to cryptocurrency. CoinGape reported that the regulator dismissed the Kraken lawsuit with prejudice earlier this year. This implies that Kraken was not required to acknowledge any misconduct, pay a penalty, or modify its operations regarding the contentious staking offering.
This change has become increasingly apparent as judges have raised concerns regarding the SEC’s definition of digital assets as securities. This was apparent in how the agency addressed the XRP lawsuit in the interim.
Nevertheless, a shift in focus could indicate that the current legal framework is not adequately prepared to address decentralized technologies. According to observers, a more adaptable stance could motivate organizations to collaborate with the SEC rather than altogether avoid US markets.
Will the Concession Spread to Altcoin ETFs?
The question is whether the US SEC will extend this softer approach to significant assets such as XRP and Solana, among others, in anticipation of key ETF decisions. To provide context, the Commission recently postponed its decision on Franklin Templeton’s proposal for a spot XRP ETF.
Suppose the Commission is amenable to reconsidering its classification of digital assets and assisting trading platforms experimenting with blockchain infrastructure. This could open the door to developing new exchange-traded funds (ETFs) founded on more extensive crypto assets.
In the interim, Robinhood has recently disclosed its intention to provide US stock trading services on Arbitrum and Solana. At the same time, Superstate introduced a blockchain-based platform for trading tokenized shares.
These actions demonstrate that private companies are already progressing. The industry closely monitors the SEC’s subsequent actions as it evaluates its regulations.
