SEC Chairman Paul Atkins: Stock tokenization is innovation, and institutions are committed to advancing market progress.

Content Editor: Peter_Techub News

According to the views expressed by Paul Atkins, the chairman of the U.S. Securities and Exchange Commission (SEC), in a dialogue regarding private markets and regulation, stock tokenization is seen as an important financial innovation. The SEC is committed to promoting market innovation through a transparent regulatory framework, especially in the area of private markets. The following article, based on the dialogue content, focuses on Atkins' views on stock tokenization and its impact on private markets and regulation.

In the context of the rapidly evolving financial market, SEC Chairman Paul Atkins emphasized that tokenization, as an innovative technology, can significantly enhance market efficiency and reduce transaction costs. He stated, "Tokenization is an innovation, and it is our responsibility at the SEC to think about how to promote innovation in the market."

Atkins pointed out that in recent years, the SEC has hindered market innovation, mainly due to unclear regulatory rules and a greater reliance on "regulation by enforcement." This situation has resulted in market participants lacking clear guidance on compliance pathways, thereby limiting innovation.

However, Atkins made it clear that this situation is over. His goal is to make regulation more transparent, providing a solid compliance foundation for market participants to support the development of new products and innovative practices. He said, "My goal is to make regulation transparent, providing a solid foundation for innovation, so that people are clear about their direction of action."

The potential of stock tokenization

Atkins specifically mentioned that stock tokenization is one of the important directions for promoting market efficiency, particularly in the following two aspects:

Tokenization can significantly optimize the settlement process of securities trading. Atkins mentioned that his predecessor pushed for the "T+1" settlement mechanism (i.e., settlement and clearing completed the day after the trading day), and tokenization is the next step towards a more efficient market. By converting stocks (especially publicly traded stocks in the U.S. stock market or stocks from private companies like SpaceX) into on-chain tokens, the trading settlement time is expected to shorten further, and costs will also be significantly reduced. He pointed out: "Tokenization can bring substantial cost savings and enhance market certainty."

The tokenization of private companies and private credit market access is not only applicable to publicly traded stocks but also opens up new investment opportunities for private companies and the private credit market. For example, tokenizing equity in private companies like SpaceX can provide individual investors with the opportunity to participate in high-potential assets. Additionally, tokenization may also improve individual investors' access to the private credit market. However, Atkins also acknowledges that such markets have lower liquidity and higher valuation difficulties, especially for individual investors, and the new investment areas brought about by tokenization still require cautious exploration.

Regulatory vision to promote innovation

Atkins emphasized that the SEC's mission is not only to protect investors but also to encourage market innovation through clear rules and a transparent regulatory environment. He stated that technologies such as tokenization can make the trading and holding of securities more convenient, while also enhancing market certainty and efficiency. He particularly mentioned that tokenization is another important step following the "T+1" settlement mechanism, which will further drive the market towards a more efficient and modern direction.

Regarding the new opportunities brought by tokenization, Atkins believes that this is not only a technological breakthrough but also an innovation in the traditional financial system. Through tokenization, investors can participate more conveniently in a variety of asset classes, and the market will benefit from greater transparency and efficiency.

Paul Atkins' speech conveyed a clear message: the SEC will actively embrace financial innovation, especially in cutting-edge areas such as stock tokenization. By establishing transparent regulatory rules, the SEC is committed to providing confidence and support for market participants in their innovations. Whether it's the tokenization of stocks in public markets or access to private companies and private credit markets, tokenization brings new possibilities to the financial markets. In the future, as the regulatory environment improves and technology matures further, tokenization is expected to become an important force in reshaping financial markets.

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