More and more financial players are taking a keen interest in tokenization, the ability to issue shares and other real-world assets on the blockchain. This is an ongoing paradigm shift that the US SEC now considers “a major priority.”
The SEC focuses on tokenization
If there is one financial revolution currently underway in relation to blockchain, it is the ongoing development of the principle of tokenization applied to real-world assets (RWA). The digitization of shares and other financial securities has the potential to change the current structure of markets, in terms of both their fluidity and their opening hours.
This innovation has prompted the CEO of BlackRock, the world leader in asset management with $13 trillion under management, to reaffirm his belief in what he describes as “the next wave of opportunities” for his company. And with good reason, as it already holds more than 30% of the tokenized Treasury bill market with its BUIDL fund.
This view is clearly shared by Republican Securities and Exchange Commission (SEC) Commissioner Hester Peirce. She seems to be taking advantage of the shutdown that is currently paralyzing US institutions to lay the groundwork for the main issues ahead for this regulatory body at the DC Privacy Summit held this Thursday in Washington.
In this context where “virtually nothing is moving forward,” Hester Peirce revisits the current development of tokenization. This is an opportunity to affirm that this use case associated with blockchain is now emerging as “a major priority” in the United States. Even Nasdaq now wants to offer tokenized stock trading.
Cryptocurrencies: “an opportunity to rethink the entire system”
During her speech, Hester Peirce also discussed other crypto issues currently being analyzed by the SEC, as part of the CLARITY Act, which is intended to regulate the cryptocurrency sector. On the agenda:
- The development of rules for the issuance and distribution of tokens;
- The definition of guidelines specifying when an operation constitutes a transaction;
- Issues related to the storage of cryptocurrencies.
Hester Peirce also addressed topics related to the theme of the DC Privacy Summit, calling on the government to “zealously protect people’s right to privacy.”
This is an opportunity to rethink certain provisions of the Bank Secrecy Act—such as anti-money laundering and KYC identification—in light of the peer-to-peer realities associated with cryptocurrencies.
I am optimistic because I think crypto has reignited many of these issues. We are trying to understand how to adapt an AML/KYC framework to something that is so peer-to-peer. So I think this gives us a real opportunity to rethink the whole system.
Hester Peirce
