Commissioner Uyeda Urges SEC to Open the Door for Tokenization - Crypto Economy

TL;DR

• SEC Commissioner Mark Uyeda said that securities tokenization is becoming an operational necessity for the market and that the SEC must act quickly.
• The SEC published an exemptive application under the Investment Company Act and stated that tokenized securities will remain subject to existing law.
• Brian Armstrong said that tokenized securities could become the norm: the market for tokenized Treasuries has already surpassed $10 billion.

SEC Commissioner Mark Uyeda said that securities tokenization is approaching a stage in which it will move from a conceptual experiment to an operational necessity for the functioning of capital markets. According to his view, markets can operate in ways that reduce limitations and improve price discovery if the regulator supports the process through a structured approach and active participation from the different market participants.

Uyeda said that the SEC must move forward and strengthen market infrastructure so that U.S. capital markets continue to serve both investors and the broader economy. For that reason, he highlighted the recent publication of a public notice regarding an exemptive application under the Investment Company Act.


The SEC Does Not Relax Regulations

The Commissioner stressed that the SEC aims to foster innovation without loosening custody, disclosure, and investor protection standards when assets are represented on the blockchain. He clarified that tokenized securities will continue to be treated as securities under U.S. law, even if crypto-based systems classify them differently.

Uyeda explained that these exemptive applications should not be viewed as an endpoint, but as intermediate stages within a modernization process that keeps the historical rules of securities markets in place. Among the practical effects of tokenization, he cited greater ownership visibility, faster settlements, and improvements in processes related to corporate actions and shareholder identification. He also said that the SEC needs to consistently improve speed and visibility across tokenized securities markets.


Tokenized Bonds Surpass $10 Billion

Uyeda also noted that during the Donald Trump administration, the agency’s activity was largely limited to staff statements, roundtables, and public comment requests. Regulators moved away from using enforcement as their primary tool and returned to relying on sub-regulatory guidance and exemptive relief to enable limited-scope actions.

From the corporate sector, Coinbase CEO Brian Armstrong said that tokenized securities could become the norm. He noted that a large share of the processes associated with these instruments can be automated and that tokenization allows value to be digitized and transferred more efficiently within capital markets. Armstrong said that access to multiple asset classes through familiar platforms can become more cost-efficient over time.

Armstrong said that tokenized stocks will gain much greater relevance once continuous, 24-hour trading is enabled. Coinbase has been promoting this approach since 2021, arguing that blockchains can move stocks faster than traditional infrastructure.


Companies such as Circle, Superstate, Ondo Finance, and Securitize are working on the tokenization of U.S. Treasury bonds. According to Token Terminal data, the market capitalization of tokenized Treasuries has already surpassed $10 billion. Ondo Finance asked the SEC to support multiple tokenization models, while the agency’s Chair, Paul Atkins, and Commissioner Hester Peirce are discussing direct, intermediate, and wrapped models.