Tokenization is trending, not solely on X. Kraken and Robinhood already enable their customers to commerce tokenized shares. Bitwise’s Matt Hougan estimates the worth of belongings that may be tokenized at $257 trillion, an enormous market not but represented in modern marketplaces. Regulators are reacting to the development: U.S. Securities and Alternate Fee Chairman Paul Atkins encourages the emergence of tokenized shares, whereas his colleague Hester Peirce warns about “distinctive dangers.”
What does Hester Peirce say?
On July 9, 2025, because the tokenization of shares turned a subject of debate, SEC Crypto Job Pressure head Hester Peirce issued a press release on the SEC web site. Her message, titled “Enchanting however not Magical,” was summarized by the media as: “tokenized securities are nonetheless securities.”
In her message, Peirce emphasised that tokenized securities qualify for current securities legal guidelines. Blockchain doesn’t remodel securities into cryptocurrency or every other asset class. Due to this fact, securities legal guidelines apply to tokenized belongings, and traders and issuers should acknowledge this to keep away from dangers.
Concerning “distinctive dangers,” Peirce famous that some securities are tokenized by entities that didn’t situation them, or they tokenize safety entitlements. Merchants ought to pay attention to such potentialities as they introduce counterparty dangers, whereas distributors of tokenized securities should bear in mind their disclosure obligations.
“Whereas blockchain-based tokenization is new, the method of issuing an instrument representing a safety is just not. The identical authorized necessities apply to on- and off-chain variations of those devices.”
On the finish of her assertion, Peirce calls on market individuals to fulfill with SEC representatives to work collectively on creating a transparent authorized framework for tokenized securities buying and selling.
The Biden-era SEC Chair, Gary Gensler, was identified for contemplating most cryptocurrencies unlicensed securities, resulting in a number of authorized battles. Hester Peirce’s assertion is markedly totally different. She reminds the general public that the format of securities doesn’t change their authorized essence. Gensler claimed altcoins are securities; Peirce says securities are securities.
Does Peirce’s assertion characterize the SEC’s place?
Whereas Peirce’s feedback are cautionary, SEC Chair Paul Atkins has made favorable statements about tokenized shares. As reported by a number of media retailers, Atkins referred to tokenized securities as “innovation” and said that the SEC ought to advance innovation within the market.
He did say that, however Atkins is just not suggesting present buying and selling practices can stay unchanged. In the identical interview, he famous that tokenized securities usually are not a brand new product sort, however considers them helpful for the market and seeks to regulate the principles accordingly.
Total, Atkins and Peirce are aligned, so Peirce’s assertion absolutely matches the SEC chair’s imaginative and prescient.
What are the issues within the RWA markets?
Elevating consciousness amongst merchants, market supervision, and rule changes are very important as there have been current incidents through which corporations denied involvement with tokenized securities traded or introduced by marketplaces.
One such occasion is OpenAI’s current dismissal of Robinhood CEO Vlad Tenev’s public assertion that tokenized OpenAI shares would quickly be tradable on Robinhood. Tenev later admitted that “inventory tokens” traded on Robinhood don’t qualify as OpenAI fairness.
What’s the way forward for tokenized shares?
Robinhood’s Vlad Tenev has known as for the tokenization of shares, believing it’s going to empower retail traders to commerce securities and profit institutional merchants as nicely. In a Bloomberg interview, he talked about that the SEC is working with companies, together with Robinhood, to regulate guidelines for tokenized shares.
In a current memo, Bitwise CIO Matt Hougan outlined the prospects for the tokenized inventory market. He estimates the full worth of the worldwide inventory and bond markets at $257 trillion and predicts that Layer 1 blockchains and marketplaces will compete for items of this rising market. Hougan cites BlackRock CEO Larry Fink, who stated: “Each inventory, each bond, each fund, each asset, may be tokenized.”
In comparison with the $257 trillion tokenized inventory market, the estimated $2 trillion stablecoin market anticipated by 2030 is barely seen. Hougan believes tokenization can develop shortly, and says modern-day inventory token traders are “very early.”
“I nonetheless suppose it’s going to take greater than a decade earlier than nearly all of inventory and bond buying and selling occurs on-chain. However with main monetary companies like Robinhood and Tradeweb positioning themselves for the transition at this time, I’ve began to marvel: Might tokenization obtain 1-5% penetration in a couple of years? Might a dozen main pilot tasks elevate us to that stage of market penetration? It appears doable, and it will translate into trillions of {dollars} … greater than every other crypto utility or asset, together with Bitcoin.”
