The US Securities and Exchange Commission (SEC) is exploring the possibility of introducing an “innovation exemption” to support the growing tokenization ecosystem, according to SEC Chairman Paul Atkins. This potential exemption is part of broader efforts to facilitate the development of tokenized securities and new trading models within the regulatory framework.
Atkins made these remarks following the House passage of a significant stablecoin bill that could reshape the digital asset landscape. The SEC staff is currently examining ways to ease regulatory barriers and provide relief measures to support the infrastructure required for tokenized securities.
The proposed innovation exemption aims to incentivize tokenization and accommodate new market structures within the regulatory framework. This regulatory shift comes at a crucial time, as the stablecoin legislation has been cleared by the US House and is awaiting final approval from President Donald Trump. The bill sets out clear regulatory guidelines for dollar-backed stablecoins, requiring issuers to hold reserves in safe assets overseen by regulators.
Atkins expressed support for the stablecoin legislation and emphasized the importance of establishing clear rules for the digital asset industry. His pro-tokenization stance marks a departure from the previous SEC chair’s aggressive enforcement actions. Atkins intends to roll back certain policies from the previous administration, including rules allowing brokers to act as digital asset custodians.
The SEC’s flexible approach to regulation aligns with the growing trend of tokenizing real-world assets. Traditional financial institutions and blockchain companies are exploring tokenization of US stocks and private market products. The surge in tokenized real-world assets in 2025 indicates a transformative shift in capital markets, with market value increasing by over 260% this year.
Tokenized private credit and US Treasury debt are driving the tokenization boom, accounting for 92% of the total market for tokenized assets. Atkins views tokenization as a step towards greater efficiency in traditional financial systems and anticipates a broader shift towards on-chain markets.
As policymakers adapt to technological innovation, the SEC’s consideration of targeted exemptions could facilitate the scaling of tokenization efforts without compromising compliance. The innovation exemption, if implemented, would provide much-needed support to the tokenization ecosystem and contribute to the continued growth of digital assets.
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