SEC Commissioner Says Regulator ‘Willing to Work With’ Tokenized Real-World Assets

Securities and Exchange Commission (SEC) Commissioner Hester Peirce reportedly said Tuesday (Aug. 12) that the market will determine the winners among different forms of tokenized securities and other real-world assets.

During an interview with Bloomberg Television, Peirce said that the SEC is “willing to work with people who are taking different approaches,” Bloomberg reported Tuesday.

Peirce added that companies will still be required to disclose the nature of the assets that are tokenized, according to the report.

“It may be a security with different characteristics, and that’s something that needs to be conveyed to investors,” Peirce said, per the report.

PYMNTS reported in July that there has been a coordinated push by financial giants to tokenize real-world assets, sidestep traditional clearing infrastructure, and begin transitioning toward 24/7, programmable trading markets.

Examples include JPMorgan developing a new service to tokenize carbon credits, crypto exchange Kraken unveiling a platform that allows retail investors to buy tokenized versions of major U.S. equities, and Robinhood rolling out tokenized stocks to a select cohort of international users.

However, the regulatory picture remains murky, as the SEC has not offered formal guidance on some aspects of tokenization.

It was reported Aug. 1 that Bank of America is seeing growing interest from investors in the tokenization of real-world assets like stocks, bonds, bank accounts and real estate.

Investors see opportunities in fractional ownership that broadens access to previously illiquid asset classes, as well as risks of disruption to financial institutions’ transaction services business.

In July, it was reported that JPMorgan Chase & Co. strategists said the tokenization of shares of money market funds could help keep money market funds competitive with stablecoins while also creating new users for them.

“The true takeaway from this is beyond the typical way we see money funds being used as a cash management asset class — they can now use it as collateral,” JPMorgan’s Teresa Ho said at the time. “Instead of posting cash or posting Treasuries, you can post money market shares and not lose interest along the way. It speaks to the versatility of money funds.”