The landscape of cryptocurrency regulation in the United States is undergoing a significant transformation, with Securities and Exchange Commission (SEC) Chair Paul Atkins signaling a more innovation-friendly approach to digital assets, particularly tokenization. This marks a notable shift from the enforcement-driven stance of the previous administration.
Atkins has publicly expressed his support for tokenization, recognizing its potential as an "innovation" within the financial markets. This endorsement suggests a willingness to create a regulatory environment that fosters the growth and development of blockchain technology and digital assets in the U.S.
In a keynote address at the Crypto Task Force Roundtable on Tokenization on May 12, 2025, Atkins outlined his plan to develop a "rational regulatory framework for crypto asset markets". He criticized the SEC's past approaches to crypto, describing them as either ignoring crypto assets or relying on enforcement actions instead of clear rulemaking. Atkins committed to establishing "clear rules of the road" for the issuance, custody, and trading of crypto assets, with the goal of protecting investors while encouraging responsible innovation.
This policy shift has already manifested in the SEC's decision to dismiss lawsuits against crypto companies. Most recently, on May 29, 2025, the SEC announced it had agreed to dismiss its suit against Binance Holdings Limited.
Atkins' vision includes modernizing the SEC's regulatory framework to accommodate on-chain cryptocurrency within the traditional financial market. He has suggested that the SEC may provide conditional exemptive relief for market participants while pursuing notice-and-comment rulemaking. He also pledged to develop "clear and sensible" guidelines for the distribution of crypto assets that qualify as securities or investment contracts.
The SEC is considering relaxing rules for retail investors in closed-end funds that invest in private assets, such as hedge funds and private equity. This could intersect with the growing interest in tokenizing private assets, potentially offering a technological solution to retail access challenges.
Tokenization is viewed as a technology-enabled process rather than a new type of asset. It involves placing real-world financial instruments onto a blockchain, enabling programmable ownership and related transaction features. This transformation offers the prospect of automated compliance, real-time settlement, and improved transparency and inclusion for investors. SEC Commissioner Hester Peirce noted that tokenization could increase operational efficiency, transactional transparency, liquidity, and accessibility in securities markets.
Several surveys indicate that private assets are prime candidates for tokenization. A mid-2024 State Street survey revealed that 64% of institutions believed private equity was the most likely asset to be tokenized, followed by 50% choosing private credit. A Bank of America survey also found that younger investors are more than three times as likely to invest in alternative assets compared to older investors.
The potential benefits of tokenization include democratizing access to investing and providing real-time market efficiencies. Panelists at the SEC roundtable advised the SEC to consider a regulatory framework that supports innovation while remaining focused on investor protection. Industry leaders have cautioned that without swift regulatory clarity, the U.S. risks losing blockchain innovation to foreign markets that have already embraced clearer crypto frameworks.
