Tokenized Stocks Cleared as Securities, Avoiding Regulatory Rift

The U.S. crypto industry is intensifying its lobbying efforts as a key Senate bill progresses through Congress, aiming to define regulatory boundaries for tokenized assets. The Responsible Financial Innovation Act of 2025, a major piece of legislation under development in the Senate, introduces provisions that treat tokenized stocks as securities rather than commodities, addressing ambiguities in the regulatory landscape. This move is seen as critical for firms like Coinbase and Ripple, which have long advocated for clearer guidelines to enable innovation in blockchain-based financial instruments.

A key clause in the updated bill clarifies that when stocks or other securities are tokenized on a blockchain, they retain their classification as securities under existing financial regulations. This provision aims to avoid regulatory confusion that could have arisen from treating tokenized assets as commodities. The clarification is particularly relevant for the compatibility of tokenized assets with current broker-dealer frameworks, clearing systems, and trading platforms. The Senate Banking Committee is expected to vote on the bill’s portions related to the Securities and Exchange Commission (SEC) later this month, while the Agriculture Committee will address the Commodity Futures Trading Commission (CFTC) sections in October.

Despite bipartisan collaboration ongoing in the Senate, the bill has yet to secure full Democratic support. Senator Cynthia Lummis, R-Wyo., one of the bill’s lead sponsors, emphasized the need for cross-party cooperation to ensure the measure reaches President Donald Trump’s desk by year-end. Lummis noted that efforts are being made to align Democrats and Republicans on key sub-issues to build broad consensus. However, securing the necessary bipartisan backing remains a challenge, as at least seven Democratic senators would need to support the measure to ensure passage.

The evolving regulatory environment has prompted significant industry participation. In August, a coalition of 112 crypto firms, including Coinbase, Kraken, Ripple, a16z, and Uniswap Labs, urged the Senate to include explicit protections for software developers and non-custodial service providers in the bill. Their letter warned that outdated financial rules could misclassify these actors as intermediaries, stifling innovation and driving talent overseas. The coalition cited data showing the U.S. share of open-source blockchain developers dropped from 25% in 2021 to 18% in 2025, highlighting growing regulatory uncertainty as a factor.

The bill is also expected to clarify the division of oversight between the SEC and the CFTC, defining when digital assets fall under the jurisdiction of each agency. This distinction is essential for firms operating at the intersection of traditional and digital finance, as it reduces ambiguity about regulatory compliance. Commissioner Hester M. Peirce recently stated that tokenization does not change the fundamental nature of the underlying asset, emphasizing the importance of consistent regulatory treatment. Similarly, SEC Chairman Paul S. Atkins acknowledged the growing interest in tokenizing securities, noting that firms are lining up for regulatory clarity in the U.S.

With the House having already passed its version of the bill and the Senate working on its own iteration, the next steps in the legislative process will determine the final shape of the U.S. crypto regulatory framework. A full Senate vote is anticipated as early as November, and the outcome could significantly influence how tokenized assets are integrated into mainstream financial markets.

Source:

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[2] US Senate Bill Proposes To Treat Tokenized Stocks As ... (https://finance.yahoo.com/news/us-senate-bill-proposes-treat-134706233.html)

[3] Senate crypto bill adds clause to keep tokenized stocks ... (https://cointelegraph.com/news/senate-crypto-bill-tokenized-securities-clarification)

[4] Launching Tokenized Stocks & U.S. Securities Regulators ... (https://faruqilaw.com/blog/1053/token-talks-launching-tokenized-stocks-u-s-securities-regulators-openness-to-discussing-tokenized-securities)

[5] Modern Markets, Enduring Protections: Protecting Investors ... (https://www.sifma.org/resources/news/blog/modern-markets-enduring-protections-protecting-investors-in-tokenized-securities/)