U.S. Regulators Draw Clear Lines in Tokenized Securities Territory

The U.S. Senate has moved to clarify the regulatory status of tokenized stocks and securities under a revised version of the Responsible Financial Innovation Act of 2025. This clause, added to the bill, explicitly ensures that when stocks and other securities are tokenized on a blockchain, they retain their classification as securities and do not fall under commodities regulation. The provision is intended to resolve regulatory ambiguities and align tokenized assets with existing broker-dealer frameworks, clearing systems, and trading platforms. This step is seen as critical to supporting innovation in digital asset markets while ensuring compatibility with established financial infrastructure.

Senator Cynthia Lummis (R-Wyo.), a primary sponsor of the bill, emphasized the urgency of passing the legislation, stating that the Senate aims to send the bill to President Donald Trump by the end of the year. The Senate’s version of the bill is still in progress, with the House having passed its own market structure legislation in July. Lummis noted that the Senate Banking Committee is expected to vote on provisions related to the Securities and Exchange Commission (SEC) this month, while the Agriculture Committee will address the Commodity Futures Trading Commission (CFTC) in October. A full Senate vote could follow as soon as November. Despite bipartisan discussions, the bill has yet to secure Democratic support, with Lummis acknowledging the need for cross-party collaboration to ensure passage.

The broader goal of the Responsible Financial Innovation Act is to establish clear regulatory boundaries between the SEC and the CFTC in overseeing digital assets. The bill aims to reduce regulatory overlap and confusion, particularly as tokenized securities become increasingly common. This effort aligns with broader initiatives from U.S. regulators to foster innovation in crypto markets. In a recent joint statement, SEC Chairman Paul S. Atkins and CFTC Acting Chair Pham emphasized the importance of harmonizing regulatory frameworks to support the development of innovative products such as perpetual contracts, event contracts, and decentralized finance (DeFi) protocols. They highlighted the need for coordinated efforts to address market structure challenges and reduce unnecessary regulatory burdens that hinder innovation.

The push for regulatory clarity has also been supported by industry stakeholders. Last month, a coalition of 112 crypto firms, including major players like Coinbase, Kraken, and Ripple, urged the Senate to include protections for software developers and non-custodial service providers in the bill. The group argued that outdated financial rules risk misclassifying these actors as intermediaries, stifling innovation and driving talent overseas. According to data cited in a letter to the Senate Banking and Agriculture Committees, the share of U.S.-based open-source blockchain developers has declined from 25% in 2021 to 18% in 2025. These concerns underscore the urgency of creating a regulatory environment that supports technological advancement while safeguarding investors.

The proposed bill and related regulatory developments reflect a broader shift in the U.S. approach to digital assets. While the SEC has historically taken a cautious stance toward crypto, recent statements from senior officials indicate a more collaborative and innovation-friendly posture. Commissioner Hester M. Peirce, for instance, has highlighted the potential of tokenization to enhance capital formation and investor utility, while emphasizing that tokenization does not alter the fundamental nature of the underlying asset. These statements, along with initiatives like the SEC’s Project Crypto, suggest a growing recognition of the need for structured yet flexible regulatory frameworks that accommodate technological progress without compromising market integrity or investor protection.

Source: [1] Senate seeks to rein in stock tokenization in latest crypto ... (https://www.cnbc.com/2025/09/05/senate-stock-tokenization-crypto-bill.html) [2] Joint Statement from the Chairman of the SEC and Acting ... (https://www.cftc.gov/PressRoom/SpeechesTestimony/phamatkinsstatement090525) [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] What are the implications of the proposed U.S. Senate bill ... (https://www.onesafe.io/blog/new-us-crypto-regulations-payroll-solutions) [6] Digital Press Briefing: U.S. Securities and Exchange ... (https://www.state.gov/digital-press-briefing-u-s-securities-and-exchange-commission-chairman-paul-atkins/)