SEC Chair Paul Atkins Supports Tokenized Stocks Despite Regulatory Caution

Tokenization of securities has gained significant traction, with platforms like Kraken and Robinhood already allowing users to trade tokenized stocks. The potential market for tokenized assets is vast, with estimates suggesting a value of $257 trillion. This trend has caught the attention of regulators, with U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins encouraging the emergence of tokenized stocks, while his colleague Hester Peirce has issued a cautionary statement.

On July 9, 2025, Hester Peirce, head of the SEC Crypto Task Force, released a statement titled “Enchanting but not Magical” on the SEC website. The statement emphasized that tokenized securities are still subject to existing securities laws, regardless of the blockchain technology used. Peirce warned about the unique risks associated with tokenized securities, such as counterparty risks and disclosure obligations. She called on market participants to engage with SEC representatives to develop a clear legal framework for tokenized securities trading.

Peirce's statement contrasts with the approach of the previous SEC Chair, Gary Gensler, who considered most cryptocurrencies unlicensed securities. Peirce's message is clear: the format of securities does not change their legal essence. While Gensler claimed altcoins are securities, Peirce asserts that securities remain securities, regardless of tokenization.

Despite Peirce's cautionary tone, SEC Chair Paul Atkins has expressed support for tokenized stocks, referring to them as an innovation that the SEC should advance. Atkins acknowledges that tokenized securities are not a new product type but sees their potential benefits for the market. He seeks to adjust the rules accordingly, aligning with Peirce's vision for a clear legal framework.

The recent incidents involving companies denying involvement with tokenized securities traded or announced by marketplaces highlight the need for increased awareness and market supervision. For instance, OpenAI dismissed Robinhood CEO Vlad Tenev's public statement that tokenized OpenAI shares would soon be tradable on Robinhood. Tenev later clarified that the "stock tokens" traded on Robinhood do not qualify as OpenAI equity.

The future of tokenized stocks looks promising, with industry leaders like Robinhood's Vlad Tenev advocating for the tokenization of shares. Tenev believes this innovation will empower retail investors and benefit institutional traders. Bitwise CIO Matt Hougan predicts that Layer 1 blockchains and marketplaces will compete for pieces of the emerging $257 trillion tokenized stock market. Hougan cites BlackRock CEO Larry Fink, who said that every stock, bond, fund, and asset can be tokenized. Compared to the $2 trillion stablecoin market expected by 2030, the tokenized stock market represents a significant opportunity. Hougan believes that tokenization can develop quickly, and modern-day stock token investors are "very early." He suggests that tokenization could achieve 1-5% penetration in a few years, translating into trillions of dollars and surpassing any other crypto application or asset, including Bitcoin.