To make improvements in security, the US Securities and Exchange Commission’s Crypto Task Force is putting more effort into examining blockchain for issuing and trading tokenized securities. The group met individually with Nasdaq, Plume Network and Etherealize to discuss issuing and trading securities using public blockchains and each meeting included suggestions for regulatory sandboxes.
Nasdaq has introduced its proposal for a digital venue.
On May 21, Nasdaq urged the Task Force to exempt tokenized shares, bonds and ETFs from new registration rules. And instead creating a new platform for listing digital asset investment contracts alongside commodity-style tokens. They also called for both the SEC and CFTC to provide safe harbor for assets where it’s unclear which regulations apply.
Plum’s idea for On-Chain Markets
On May 22, Arbitrum-based Plume Network informed the SEC that real-world asset tokenization works best on permissionless blockchains. They suggested creating a regulatory sandbox for the 1933 Securities and 1934 Exchange Acts. With protection given to new DeFi services and “credible neutrality” used for sales and trading.
Etherealize’s Attention to Infrastructure
Etherealize and policy firm MetaLeX say that current transfer agent rules push companies to store the same information in traditional databases which makes blockchain advantages less useful. They suggested that secure blockchains be regarded as official share registers and that fast paths be created for tokenized securities.
The same overarching ideas keep appearing.
At each gathering, participants urged the use of clear taxonomy, individual modules for rules and pilots in stages, all the while supporting the SEC’s role in protecting investors. The Task Force staff looked at the materials and suggested that future rules might use sandbox models.
Week full of meetings and sessions
Such meetings point to increased enthusiasm from institutions for tokenized securities. Furthermore, they want clear rules from regulators through sandbox programs that support both innovation and looking after investors.
