The SEC published new digital asset guidance.
The regulatory agency released its “Innovation Exemption” rulemaking clarification for companies looking to adopt and build tokenized financial products.
Labelled as Tokenized Securities Venues (TSV), the SEC is allowing a permissioned trading environment for innovators, including the use of Automated Market Makers (AMMs) and liquidity pools for the assets. However, a criteria for this exemption has to be met.
Specifically, actors who will be issued this exemption are able to offer tokenized securities without having to be defined as an “exchange” and “dealer” under the old law. There is a five year expiry period per exemption and public comments are invited.
This follows the failed Clarity Act Cloture Vote earlier this week.
SEC Greenlights Tokenized Securities
Tokenized securities are the most popular of tokenized products at the moment.
The ability to buy, transfer, and sell onchain stocks on private and public blockchain networks enables a far greater number of options for all parties involved.
Additionally, it allows the originator, transfer agent, and receiver to increase the speed at which instructions are processed and carried out. 24/7 settlement is not only limited to payments.
Tokenized securities, tokenized money markets, and tokenized deposits are perhaps the three most evolving aspects of modern finance requiring greater regulation.
Without the Clarity Act passing in the U.S., attention is now on the regulatory agencies, such as the SEC and CFTC, to ensure that there are clear rules for digital asset trading activity.
Companies like Securitize, Ondo, and Superstate are already working on infrastructure for tokenizing in this exact sphere, while exchanges like Robinhood, Coinbase, and Kraken, are offering their own versions of tokenized stocks.
More legacy institutions, such as BlackRock, Wisdom Tree, Fidelity, and others are increasing their involvement in tokenized money markets and using tokenized assets as collateral.
Recently, the DTCC ran a tokenization production pilot across different trading use-cases.
