SEC Considers Regulatory Adjustments to Boost Tokenization Growth

The US Securities and Exchange Commission (SEC) is actively considering regulatory adjustments to foster the growth of the tokenization ecosystem. According to SEC Chairman Paul Atkins, the regulatory body is evaluating potential changes to existing frameworks to accelerate the adoption of tokenization. This move comes as the House of Representatives has passed significant stablecoin legislation, which is expected to reshape the digital asset landscape.

Atkins highlighted that the SEC staff is exploring the possibility of an "innovation exemption" to support the tokenization ecosystem. This exemption could involve easing certain regulatory barriers and introducing new allowances for novel trading models. The goal is to provide narrowly tailored relief measures that would help build the necessary infrastructure for tokenized securities.

The timing of these considerations is crucial, as the House has recently passed the GENIUS Act, the CLARITY Act, and a third key crypto bill. These legislative actions are aimed at establishing clear regulatory guardrails for dollar-backed stablecoins, requiring issuers to hold reserves in short-term government debt or similar safe assets. Atkins welcomed these legislative developments, emphasizing the SEC's eagerness to establish "clear rules of the road" for the broader digital asset industry.

Atkins' stance represents a significant shift from his predecessor, Gary Gensler, whose tenure was marked by aggressive enforcement actions. Atkins has indicated plans to roll back several Gensler-era policies, including a controversial rule that allowed brokers to act as digital asset custodians. This openness to regulatory flexibility aligns with the growing interest from both traditional financial firms and blockchain-native companies in tokenizing real-world assets.

Atkins' remarks come at a time when the tokenization space is experiencing significant growth. Analysts view tokenization as a transformative shift for capital markets. In 2025, tokenized real-world assets have surged, with the market value climbing more than 260%. Much of this growth is driven by tokenized private credit and US Treasury debt, which together represent 92 percent of the total market for tokenized assets.

Atkins has described tokenization as "the next step" in bringing greater efficiency to traditional financial systems. He also hinted that a broader shift toward on-chain markets is imminent. As policymakers work to keep pace with technological innovation, the SEC's willingness to carve out targeted exemptions could be crucial. If adopted, the innovation exception could provide the necessary breathing room for tokenization efforts to scale, without being hindered by outdated compliance rules.