Tokenization May Provide Global Markets With More Efficiency, According to SEC Commissioner

A commissioner with the U.S. Securities and Exchange Commission (SEC) says tokenization is gaining traction among blue-chip companies and can provide further efficiencies to global markets and investors.

During the SEC’s 30th Annual International Institute for Securities Market Growth and Development, Commissioner Mark T. Uyeda explains how tokenization – the conversion of assets such as securities holdings into digital tokens – can benefit capital markets.

“Tokenization may provide transactions with a higher level of security, transparency, and immutability. It also may remove the need for most intermediaries, streamlining the process and reducing transaction costs.”

But Uyeda says regulators need to understand the costs, benefits and risks of the technology, urging his colleagues to learn from the U.K. Financial Conduct Authority (FCA), which has already published a blueprint for the implementation of tokenization.

“While the FCA continues its review of securities tokenization, it is important to highlight the depth of research they are undertaking to allow for innovation and growth while still protecting investors from harm. More importantly, other regulators can review the FCA’s research in considering what steps, if any, they might take regarding tokenization.”

Research by US-based crypto exchange Coinbase shows that 86% of Fortune 500 executives see the potential benefits of asset tokenization and about 35% are drawing up tokenization plans.

According to the crypto exchange, a survey of Fortune 500 executives found that over half of them are currently working on on-chain projects.

“America’s top public companies are busier on-chain than ever. On-chain projects announced by Fortune 100 companies have increased 39% year-over-year and hit a record high in Q1 2024. A survey of Fortune 500 executives finds that 56% say their companies are working on on-chain projects.

From the biggest legacy brands to small business, stablecoins to tokenized T-bills, trusted names and products in finance are embracing blockchain technology and crypto, driving innovation and providing on-ramps for widespread adoption.”

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