Regulators and Industry Align on Future of Tokenized Securities

The U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force convened with the Securities Industry and Financial Markets Association (SIFMA) on September 10, 2025, to discuss regulatory approaches for tokenized securities. The meeting, requested by SIFMA on August 7, focused on preserving investor protections and market integrity while exploring opportunities for innovation within the existing regulatory framework. The agenda included key considerations for designing a regulatory sandbox to test tokenization models, ensuring compliance with custody protections and ownership rights.

Twenty individuals participated in the meeting, including 12 members from the SEC’s Crypto Task Force and eight representatives from SIFMA. Notable attendees included Ken Bentsen, SIFMA’s President and CEO, and Peter Ryan, Managing Director of International Capital Markets at SIFMA. SIFMA emphasized that tokenized securities should retain their classification as traditional securities and operate within existing market rules, ensuring functional separation and clear ownership rights.

The discussion also explored the potential for creating an innovation exemption that would allow for limited testing of tokenization models. The Crypto Task Force and SIFMA aligned on the need to balance innovation with regulatory clarity, ensuring that blockchain-based models maintain the core protections offered by traditional markets. SIFMA highlighted the advantages of the current U.S. market structure and advocated for its use as a foundation for new frameworks.

This meeting follows a series of engagements by the SEC’s Crypto Task Force with industry stakeholders, including recent discussions with Kraken and Robinhood. In August, the task force held a meeting with Kraken to examine the future of digital finance, particularly tokenization and staking. Additionally, in early September, the task force met with representatives from Robinhood and its legal advisors to discuss the company’s crypto asset services and its exploration of tokenizing traditional securities.

The broader regulatory landscape for digital assets is also evolving. The SEC continues to seek clarity on the treatment of various tokens, including network tokens such as Bitcoin and Ethereum, which are essential to decentralized protocols. Submissions to the Crypto Task Force have called for the SEC to affirm that these tokens should not be classified as securities under the Howey Test, even if they are distributed through fundraising mechanisms. Some proposals have also urged the SEC to issue interpretive guidance confirming that tokenized securities remain subject to federal securities laws and to revise transfer agent and recordkeeping rules to accommodate blockchain-based systems.

The push for a well-regulated yet innovative digital asset market is not limited to the U.S. Internationally, initiatives such as the UK’s Digital Securities Sandbox and the EU’s DLT Pilot Regime have enabled live testing of tokenized securities under flexible regulatory conditions. These efforts demonstrate a growing willingness among global regulators to experiment with blockchain-based financial instruments. Meanwhile, regulatory sandboxes in Singapore and Japan continue to advance tokenized bond markets, with Japan receiving strong support from major banks.

As the SEC and other regulators refine their approaches, industry players are also making significant strides. Nasdaq has filed with the SEC to allow tokenized securities trading on its primary exchange, with plans to implement the system as early as Q3 2026. BlackRock’s BUIDL fund, launched on the Ethereum blockchain, has become the largest tokenized money market fund, demonstrating the viability of blockchain in institutional finance. These developments signal that tokenized securities are moving beyond experimental phases and into mainstream financial markets.