As blockchain technologies continue to reshape global finance, US regulators face the ongoing challenge of updating legacy oversight structures to meet the realities of decentralized innovation.

In early 2025, the SEC launched a dedicated Crypto Task Force to help steer this transition. Comprising 14 professionals from across the agency, including notable experts with deep industry ties, the Task Force was created to identify regulatory blind spots, recommend updates to custody and disclosure frameworks, and develop more effective enforcement strategies in the digital asset space.

This initiative builds on an active public engagement process that has already generated over 100 written comments, ranging from philosophical reflections on the future of finance to highly detailed legal frameworks for reform.

To supplement this input with grounded, practical insight, the SEC convened a series of roundtables bringing together a broad spectrum of stakeholders, including legal scholars, technologists, traditional financial firms, and crypto-native entrepreneurs.

The fourth roundtable in this series, held on May 12 under the theme Tokenization – Moving Assets Onchain: Where TradFi and DeFi Meet, focused on the growing convergence between traditional financial assets and decentralized infrastructure.

Participants explored the technological mechanics of tokenization, its implications for market structure, the operational risks of deploying public versus permissioned blockchains, and the potential for programmable assets to redefine financial intermediation. The conversation revealed both significant enthusiasm and deep disagreement about how best to regulate and scale these innovations.

As the SEC continues to shape its digital asset strategy, this session reinforced an important lesson: it is often wise to cast a wider net. In areas marked by rapid technological evolution and competing worldviews, drawing on a diverse range of voices is critical to ensuring that both the regulatory solutions and the technologies they govern are genuinely fit for purpose.

Statements from regulators

Commissioner Mark Uyeda addressed the growing relevance of tokenization in financial markets. He underscored the importance of regulatory transparency for emerging technologies, pointing to tokenization as a continuation of the long history of technological transformation in finance.

“Market participants should not be left guessing as to how they can comply with the Commission rulebook,” he said.

He emphasized that regulators must not shy away from new financial tools simply because they challenge existing regulatory frameworks. Rather, he advocated for inclusive rulemaking that draws from the real-world experience of both investors and issuers.

Uyeda also highlighted the transformative potential of tokenization on core market operations such as trading, settlement, and ownership records. Beyond operational efficiency, tokenized assets could reduce transactional frictions and enhance liquidity in markets traditionally burdened by high intermediation costs.

“Market participants should not be left guessing as to how they can comply with the Commission rulebook.”

Mark Uyeda, SEC Commissioner

Commissioner Caroline Crenshaw offered a measured critique of the growing push to tokenize real-world assets. Referencing the movie Field of Dreams, she questioned the assumption that building blockchain-based market infrastructure will automatically attract broad adoption and deliver systemic improvements.

Crenshaw emphasized the ambiguity surrounding the term “tokenization” itself, whether it means issuing native digital securities or representing existing ones on-chain, and warned that these distinctions carry real regulatory implications.

Crenshaw also challenged the idea that tokenization would yield immediate benefits like faster settlement. While proponents advocate for moving from T+1 to real-time settlement (T+0), she noted that the current delay serves vital market functions such as netting, liquidity preservation, and compliance checks.

These safeguards, she argued, are critical for market stability and investor protection, especially for retail investors who may be disadvantaged by a shift to pre-funded transactions. Rather than retrofitting financial regulation to accommodate a speculative model, Crenshaw called for regulators to carefully assess whether the proposed changes solve any concrete market dysfunction, warning that large-scale transformation without clear justification risks doing more harm than good.

Commissioner Hester Peirce framed tokenization as a natural evolution of internet-based innovation, likening blockchain to prior generations of transformative protocols. In her view, blockchain networks are more than just decentralized ledgers, they are programmable platforms that can enhance how financial assets are used, tracked, and traded.

Dynamic features

She emphasized that tokenization does not merely replicate traditional securities in digital form but imbues them with dynamic features through smart contracts, enabling automated actions like dividend payments and peer-to-peer settlement.

According to Peirce, moving assets from siloed databases to open, interoperable crypto networks could unlock gains in liquidity, accessibility, and efficiency, particularly if tokenized assets are able to interact seamlessly with other decentralized applications.

Chairman Paul Atkins delivered a wide-ranging keynote advocating for a modernized, principle-based regulatory framework to support tokenization and broader crypto asset activity. Atkins argued that tokenized securities can enhance efficiency, liquidity, and accessibility, particularly when smart contracts automate key functions like dividend payments or collateral management.

However, he warned that legacy regulatory approaches are poorly suited to these innovations and called for a departure from past SEC tactics, including what he criticized as ad hoc enforcement and outdated registration requirements.

Atkins outlined three priority areas for reform: issuance, custody, and trading. He proposed revisiting disclosure frameworks for crypto asset offerings, expanding custody options to include self-custody and innovative technological safeguards, and enabling more flexible trading models, including “super apps” that blend securities and non-securities.

Capital markets 2.0

The first panel, titled Evolution of Finance: Capital Markets 2.0 was moderated by Jeff Dinwoodie of Cravath and brought together key voices from across traditional finance, asset management, and the digital asset ecosystem.

Panelists included Cynthia Lo Bessette (Fidelity), Eun Ah Choi (Nasdaq), Will Geyer (Invesco), Sandy Kaul (Franklin Templeton), Robert Mitchnick (BlackRock), Christine Moy (Apollo Management), Johnny Reinsch (Tokenized Asset Coalition), Christian Sabella (DTCC), and Alex Zozos (Superstate).

The panel began by setting out to define “tokenization.” Most agreed that tokenization represents a technological evolution from paper certificates to book entries to programmable assets on blockchain. It enables registered ownership with smart contract functionality, embedding transfer restrictions, compliance rules, and investor rights directly into the asset itself.

This “new file format,” as one panelist put it, could reduce reconciliation errors and automate post-trade processes. Yet even as several speakers emphasized the legal parity between tokenized and traditional securities, many noted that a shared taxonomy, especially one that clearly distinguishes tokenized securities from crypto commodities, remains a critical regulatory precondition.

Panelists also laid out compelling use cases for tokenization. These ranged from shortening settlement cycles and increasing collateral utility to enhancing dividend distribution. Yet challenges abound: the dual-recordkeeping dilemma, legacy infrastructure optimized for T+1, and interoperability concerns across blockchain networks and regulatory domains.

Turning to guidance for regulators, participants emphasized that tokenization should be treated as an evolution, not a revolution. There was consensus on the need to modernize the definition of a transfer agent, perhaps by formally recognizing the role of “tokenization agents.” Others called for safe harbor frameworks and clearer rules around smart contracts and self-custody.

A recurring theme was the imperative to expand the regulatory mindset beyond consumer protection to encompass consumer opportunity. As panelists argued, regulatory systems designed in response to 1970s paper crises have ossified into architectures that limit investor autonomy, increase costs, and stifle innovation.

With today’s technologies, real-time ledgers, embedded compliance, and interoperable assets, comes the potential to return to a model of individualized, transaction-based ownership at scale.

As the discussion drew to a close, a subtle tension emerged between those urging the SEC to lead and those calling for the market to self-coordinate under general regulatory guardrails. The panel gravitated toward a middle path: regulators should not dictate interoperability or technology design, but should outline expectations and articulate principles that foster innovation without compromising trust.

Tokenization, in this view, is neither a disruptive rupture nor a silver bullet, it is a pragmatic, programmable layer that, if guided wisely, could modernize capital markets while preserving the foundational strengths of US financial regulation.

Future of tokenization

Moderated by Tiffany Smith of WilmerHale, The Future of Tokenization panel brought together a rich mix of academics, technologists, institutional operators, and venture capitalists to dissect the evolving role of tokenization in capital markets.

Panelists included Hilary Allen (American University), Gene Hoffman (Chia Network), Johann Kerbrat (Robinhood), Kelly Mathieson (Canton), Sidney Powell (Maple Finance), Georgia Quinn (Securitize), Joshua Rivera (Blockchain Capital), and Angela Walch (Independent Researcher).

The panel opened by revisiting a recurring question: is tokenization a technology, an asset, or something in between? Several panelists advocated for a process-based view, where tokenization is simply a way of reformatting existing securities onto a programmable ledger.

However, the very act of embedding smart contract functions into the asset blurs the line between form and substance. Panelists emphasized this convergence, arguing that the technology is no longer just an infrastructure layer, it is increasingly part of the asset’s definition and value proposition.

A unifying theme emerged around the practical benefits tokenization could deliver, particularly for retail investors and underutilized asset classes. Fractional ownership, real-time redemption, and seamless cross-border transfers were frequently cited.

Several panelists highlighted how programmable assets can remove traditional operational chokepoints such as delayed settlements, batch processing, and opaque custodial chains, thus expanding access to private credit and bespoke portfolios.

Mathieson contextualized these changes within broader capital market trends, suggesting that tokenization could liberate trillions in currently idle collateral, enhancing systemic liquidity and investor returns.

Yet, as panelists noted, the path to this vision requires standardizing token features, resolving legal-title ambiguities, and ensuring governance mechanisms evolve in tandem with technical capabilities.

A sharp divergence emerged around blockchain architecture. Academic voices warned that public, permissionless blockchains introduce unacceptable operational risks when used as core financial infrastructure. Their concerns spanned governance opacity, susceptibility to validator collusion, and the risk of cascading smart contract failures.

By contrast, technologists defended the resilience of these systems, pointing to real-time transparency and long-term uptime as evidence of their growing maturity.

• We have covered the roundtable series in depth; the first looked at the requirements for a new regulatory framework, the second explored regulatory pathways for crypto trading, while the third roundtable focused on crypto custody.