Hester Peirce’s Advisory on Tokenized Securities
Hester Peirce, a member of the US Securities and Exchange Commission (SEC), recently cautioned companies that are contemplating the distribution and trading of tokenized securities. In her remarks made on Wednesday, Peirce urged businesses to engage in discussions with SEC representatives regarding their planned tokenized offerings, especially as new market participants and traditional firms are increasingly adopting on-chain products.
Key Remarks on Blockchain and Securities
Though she did not specifically mention Robinhood, her advisory came shortly after the company introduced a layer-2 blockchain aimed at tokenization. Peirce emphasized that despite the transformative capabilities of blockchain technology, it does not alter the fundamental characteristics of the securities involved.
“Tokenized securities remain securities,”
she said, highlighting that all market actors need to comply with federal securities laws when dealing with these financial instruments.
Regulatory Landscape and Industry Developments
The sentiment expressed by Peirce resonates with previous comments from former SEC Chair Gary Gensler, who consistently encouraged firms interested in deploying crypto-related securities to consult with SEC officials. However, shifts in regulatory philosophy have been hinted at since the start of Donald Trump’s presidency and the recent appointment of Paul Atkins as SEC Chair, suggesting a potential re-evaluation of the regulatory framework surrounding the crypto landscape.
In line with industry developments, Robinhood appears to be positioning itself strategically to offer tokenized versions of US stocks and exchange-traded products to European investors. The company is reportedly aware of the implications this could have for US securities laws and had submitted a proposal to the SEC back in May. The proposal seeks to establish a regulatory framework for tokenized real-world assets. Peirce expressed the agency’s readiness to collaborate with market participants to update and possibly create exemptions from outdated rules when technological advancements call for such changes.
Legislative Efforts in the Crypto Space
As the SEC awaits legislation on crypto market structure from Congress, Republican lawmakers in the House of Representatives are taking steps toward a bill known as the Digital Asset Market Clarity Act. This plan aims to clearly delineate the regulatory roles of the SEC and the Commodity Futures Trading Commission (CFTC) regarding digital assets in the United States.
