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- SEC embraces blockchain as tokenized securities move into reality.
- Uyeda signals regulatory flexibility as tokenization transforms financial markets.
- Tokenized securities face same rules, with no new regulations needed.
U.S. Securities and Exchange Commission (SEC) Commissioner Mark T. Uyeda recently announced a significant shift in the agency’s approach to blockchain technology and tokenized securities. In his speech delivered at the Asset Management Derivatives Forum, Uyeda disclosed that the SEC is no longer considering the concept of tokenization as a mere theoretical idea but as a fast-paced reality. He stressed that players in the market are already exploring the manner in which conventional securities can be issued, held, and transferred on blockchain networks.
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Uyeda argues that the SEC has nothing to do but apply the current securities laws to new on-chain securities, rather than to establish a new regulatory framework of blockchain securities. This implies that the fundamental legal requirements, like disclosure, protection of investors, and custody, are not lost. This does not affect these fundamental responsibilities with technological advances, as Uyeda described, such as tokenization. Instead, the SEC has the task of incorporating these technologies into the current regulatory environment without posing unwarranted challenges to the market participants.
The comments made by the Commissioner support the current position of the SEC, according to which tokenized securities must be similarly regulated as their traditional versions. Indeed, the agency made it clear last month that the tokenized assets remain within its jurisdiction and must comply with the same rules of registration, disclosure, and other legal requirements.
Tokenization Becomes a Practical Reality for the SEC
Another point brought out by Uyeda was that tokenization is no longer just a theory but is now coming into the practice arena. Recently, the SEC issued a public notice that Wisdom Tree Digital Trust had applied under the exemption to permit affiliated dealers to trade tokenized shares of a money market fund. The move is a significant step in tokenized fund distribution models and portends the willingness of the SEC to update its attitude to the changing financial environment.
The SEC is demonstrating that it can be modernized by pursuing such applications without jeopardizing the purpose of old securities regulations. In addition, Uyeda observed that the SEC is determined to be technology-neutral in its rulemaking, which concentrates on the results and not the procedures. This change recognizes the possibility that blockchain will avoid the traditional intermediation frameworks, bringing issuers and investors into more direct contact.
The statements of Uyeda suggest that SEC is also evolving under the impact of the emergence of blockchain technology to make sure that tokenized securities do not contradict the current rules, but also to enjoy the positive aspects of modernization. It will be an essential move in the developing policy of the SEC toward digital assets.
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