SEC launches project crypto initiative to modernize securities rules and shift markets on-chain

SEC launches project crypto initiative to modernize securities rules and shift markets on-chain

The U.S. Securities and Exchange Commission (SEC) has announced the launch of Project Crypto, an initiative aimed at modernizing securities rules and shifting financial markets onto blockchain technology. This move comes amidst a wave of regulatory developments surrounding digital assets and stablecoins, as the U.S. Congress continues to pass landmark legislation in this space.

On July 2, 2025, the SEC announced Project Crypto, which seeks to leverage blockchain technology to enhance the efficiency and transparency of securities markets. The initiative is part of a broader effort by the SEC to adapt to the evolving landscape of digital assets and cryptocurrencies. The project aims to streamline regulatory processes, reduce operational risks, and improve investor protection through the use of smart contracts and decentralized ledgers.

The announcement follows the passage of the Guiding and Establishing National Innovation for US Stablecoins Act (Genius Act) by the U.S. Congress on July 17, 2025. The Genius Act establishes the first federal regulatory framework for "payment stablecoins," setting the stage for further developments in the digital asset sector. The SEC's initiative complements these efforts by focusing on the broader application of blockchain technology to securities markets.

The SEC's Project Crypto initiative is designed to address several key challenges in the securities industry. By shifting markets on-chain, the SEC hopes to reduce the risk of fraud and improve the accuracy of transaction records. The use of smart contracts can automate regulatory compliance processes, such as the settlement of securities transactions, thereby increasing efficiency and reducing costs.

The project also aims to enhance transparency in the securities markets by leveraging the immutable nature of blockchain technology. This can help investors make more informed decisions and improve market integrity. Additionally, the SEC's initiative seeks to foster innovation in the financial services sector by creating a more supportive regulatory environment for blockchain-based solutions.

The SEC's announcement of Project Crypto comes at a critical juncture for the digital asset industry. As the U.S. Congress continues to pass significant legislation in this area, such as the Genius Act and the Digital Asset Market Clarity Act, the SEC's initiative signals a commitment to staying at the forefront of regulatory innovation. By embracing blockchain technology, the SEC aims to position the U.S. as a global leader in digital asset regulation and innovation.

The SEC's Project Crypto initiative is expected to have significant implications for financial markets and investors. As the project progresses, it will be important to monitor its development and assess its potential impact on the securities industry. The initiative represents a significant step forward in the SEC's efforts to adapt to the rapidly evolving landscape of digital assets and cryptocurrencies.

References:
[1] https://www.dlapiper.com/en-us/insights/publications/blockchain-and-digital-assets-news-and-trends/2025/blockchain-and-digital-assets-news-and-trends-july-2025