US market races towards on-chain payments after SEC inaction

    Crypto AI Updates05 mins


    Traditional financial markets are rapidly moving on-chain as the head of the U.S. Securities and Exchange Commission strengthens the idea of ​​an “innovation exemption” to accelerate tokenization.

    “U.S. financial markets are ready to go on-chain,” SEC Chairman Paul Atkins wrote in a Friday

    His comments came shortly after the SEC issued a “no action” letter to a subsidiary of Deposit Trust Clearing Corporation (DTCC) allowing it to offer new securities market tokenization services.

    DTCC plans to tokenize assets including the Russell 1000 Index, exchange-traded funds that track major indexes, and U.S. Treasury bills and government bonds, which Atkins called “an important step toward on-chain capital markets.”

    “On-chain markets will bring greater predictability, transparency and efficiency for investors,” he said.

    But DTCC’s green light for the pilot is just the beginning, Atkins added, with the SEC planning to consider innovation exemptions that would allow builders to begin “moving to on-chain markets” without being burdened by “onerous regulatory requirements.”

    Source: Paul atkins

    Atkins promised to foster innovation as the industry moves towards on-chain payments. This means settling transactions on a blockchain ledger, eliminating intermediaries and enabling 24/7 trading and faster transaction finality.

    Related: Cryptocurrency approaches ‘Netscape moment’ as industry approaches inflection point

    Cointelegraph has reached out to the SEC for comment on the details and timeline of the tokenization innovation exemption.

    Atkins first proposed an innovation exemption for tokenization during his remarks at the Crypto Task Force Roundtable on DeFi on June 9th.

    The SEC’s no-action letter means that the SEC will not take enforcement action if DTCC’s product works as described. DTCC is one of the most important infrastructure providers for U.S. securities, providing clearing, settlement and trading services.

    Asset tokenization involves the minting of tangible assets on a blockchain ledger, providing access to more investors through fractional shares and 24/7 trading opportunities.

    Related: Bitcoin Treasuries Stall in Q4, but Largest Holders Continue to Accumulate Funds

    DTCC Pilots and RWA Builders Drive More TradFi On-Chain

    Cryptocurrency analysts are praising the SEC’s move to authorize DTCC’s new market tokenization service, which gives tokenized assets the same rights and investor protection mechanisms as traditional assets.

    “I’m not sure people fully understand how quickly financial markets are moving toward full tokenization…even faster than expected,” ETF analyst Nate Geraci wrote in a FridayX post.

    Over the past few months, the SEC has issued two no-action letters. One concerns the Solana-based Decentralized Physical Infrastructure Network (DePIN) project, and the other is a second no-action letter in September allowing investment advisory firms to use state-run trust companies as cryptocurrency custodians.

    Meanwhile, crypto projects continue to raise funds to build the necessary infrastructure for a tokenized on-chain market.

    On Tuesday, asset tokenization network Real Finance closed a $29 million private funding round to build a real-world asset (RWA) infrastructure layer that can foster institutional investor participation.