Tokenization Of Real-World Assets, SEC Commissioner Mark T. Uyeda, Washington D.C., May 12, 2025

Good afternoon and thank you to the panelists and attendees participating in the Commission’s roundtable on tokenization.  I appreciate your willingness to engage and share your thoughts with us.

Innovative Technologies Benefit from Regulatory Transparency

Technology has played an important role in the history of financial regulation and tokenization is no different.  These roundtables serve as an opportunity for financial regulators to seek public input on how to address new types of financial products and services.  We should not shy away from policymaking about emerging technologies, simply because it does not fit into the existing regulatory framework.  The first step in sound policymaking is seeking input from market participants.  In recent history, we seem to have forgotten a very fundamental concept: that investors and issuers have valuable observations and experiences. 

Given that we are in a “full disclosure business,” I am pleased with the Commission’s new crypto approach under the leadership of Commissioner Hester Peirce and the Crypto Task Force.  Whether the issues relate to bringing real-world assets onchain or considering custodial issues like we did at our last roundtable, we should promote a transparent regulatory environment.  Market participants should not be left guessing as to how they can comply with the Commission rulebook.  These roundtable conversations are a useful step in obtaining this information – with a view to constructing a regulatory framework that provides transparency and predictability for market participants that seek to bring assets onchain.

Potential Impacts to Key Market Processes

These conversations are particularly important given the development and deployment of new technologies, which have the potential to dramatically change how financial markets operate.  In particular, the developments related to the tokenization of real-world assets using blockchain technology implicate major financial market functions and processes like issuance, trading, transfer, settlement, and record of ownership.  In addition to these potential market improvements, tokenization presents opportunities to expand the landscape to demonstrate proof of ownership– making possible new types of uses, such as tokens that represent title to real estate or holdings of intellectual property rights. 

These implications can potentially benefit investors by enhancing liquidity for otherwise relatively illiquid assets, reducing delays associated with intermediation, and also decreasing transactional costs.  Additionally, the technology has the potential to simplify – or at least streamline – certain compliance functions, such as through smart contracts for onchain assets. 

These potential improvements in capital markets are tied to key characteristics of blockchain technology.  Blockchain technology relies on a transparent ledger and does not require a central intermediary.  Market transparency impacts transactional costs, but also implicates potential compliance costs – as more opaque and complex markets may increase compliance costs.  For example, there are many challenging regulatory questions that the Commission and its staff may need to resolve under the regime established by Regulation NMS as securities move onchain. As such, we should evaluate whether these technologies can benefit all market participants. 

Constructing a Crypto Rulebook

In the mid-1980s, then-Commissioner Joseph Grundfest described the rapid pace of technological innovation as “[t]he New Technology of Finance and the Old Technology of Regulation.”  He identified a disconnect between regulatory tools developed in the 1930’s with the technological developments of the 1980’s – noting that “just as the perfect technology has never been invented, the perfect regulation also has never been written.[1]  As we consider the implications of new technologies, we should design a framework that focuses on critical safeguards rather than trying to address every conceivable investment permutation and scenario.  This exercise is nothing new and the same principles that helped regulation move from paper certificates to electronic recordkeeping and from faxes to texts can similarly guide us to accommodate new technologies.  

I thank you all for your participation and attendance and look forward to the Commission considering next steps.