Paul Atkins, the US Securities and Exchange Commission chairman, has stated that tokenization could become a central feature of American financial markets within a couple of years. This projection highlights a vast gap, with only $670 million of the $68 trillion US equity market currently tokenized on-chain. The comments signal a regulatory push toward blockchain integration amid infrastructure challenges.
The US equity market stands at approximately $68 trillion, but tokenized assets on blockchain represent just $670 million, according to Bitwise CIO Matt Hougan. This disparity underscores the early stage of tokenization adoption. In a recent interview, SEC Chair Paul Atkins described the blend of electronic trading and distributed ledger technology as the most significant market transformation in decades. He suggested that tokenization might enable central integration in US markets within "a couple of years," marking a shift from the agency's prior resistance to innovation.
Atkins emphasized how tokenization could enhance predictability and cut risks by closing the divide between trade execution, payment, and settlement—potentially allowing intraday or real-time processes. The SEC is advancing a "token taxonomy" that builds on the Howey test to classify digital assets based on network maturity, control distribution, and lack of identifiable issuers. This aims to clarify jurisdiction and encourage onshore activity, drawing lessons from events like the 2022 FTX collapse and the stable operation of CFTC-regulated LedgerX.
Challenges persist, however. Commissioner Caroline Crenshaw warned that some "wrapped securities" in tokenized equities might not fully mirror the economic rights, liquidity, or protections of underlying assets, possibly requiring new regulations. Tensions surfaced at an SEC Investor Advisory Committee meeting, where Citadel Securities advocated classifying decentralized protocols as broker-dealers, while Coinbase countered that such rules would clash with non-custodial systems and heighten risks.
Nasdaq's proposed rule change seeks to maintain front-end trading while tokenizing post-trade via the Depository Trust & Clearing Corporation, with the SEC's response due this month. Broader hurdles include blockchain scalability; Nasdaq handles 2,920 trades per second and $463 billion daily, far exceeding current public chains. Still, real-world assets on-chain have doubled to $35.8 billion since late 2024, per RWA.xyz, signaling growing institutional interest. Globally, places like Singapore and Hong Kong lead with tokenized bonds and settlement systems, prompting US efforts to avoid offshoring through clearer rules.