tl;dr
The US Securities and Exchange Commission (SEC), led by Chairman Paul Atkins, is considering an "innovation exemption" to support growth in the tokenization ecosystem. This move aligns with recent legislative progress, including stablecoin bills passed by the House, which require issuers to back res...
The US Securities and Exchange Commission (SEC) is considering an “innovation exemption” to foster growth within the rapidly expanding tokenization ecosystem, according to Chairman Paul Atkins. This initiative aligns with recent legislative advances, including the House passage of critical stablecoin bills that set clear regulatory frameworks for dollar-backed stablecoins.
Atkins highlighted ongoing efforts by SEC staff to identify opportunities for regulatory easing, potentially introducing flexibility for new trading models and tailored relief measures that support building essential infrastructure for tokenized securities. His remarks underscore the SEC’s shift toward a more pro-tokenization approach following the approval of the GENIUS Act, the CLARITY Act, and another major crypto bill.
The stablecoin legislation, recently passed by the US House, mandates issuers maintain reserves backed by short-term government debt or similarly safe assets under regulatory oversight. Atkins praised this move, expressing the SEC’s eagerness to establish clear guidelines that promote stability and clarity within the digital asset sector.
Marking a departure from the previous chairman’s more aggressive stance, Atkins has signaled plans to roll back several regulatory policies from the Gensler era, including controversial rules around digital asset custody. This regulatory openness coincides with robust activity from both traditional financial institutions and blockchain-native firms who are driving innovations in tokenizing real-world assets, including US stocks and private market products.
Atkins emphasized the inevitability of asset tokenization as digital transformation progresses, remarking, “If it can be tokenized, it will be tokenized.” This sentiment reflects the burgeoning tokenization landscape, which has seen market value soar by over 260% in 2025 alone, reaching $23 billion from $8.6 billion at the start of the year. The market is predominantly led by tokenized private credit, comprising 58% of the total, and tokenized US Treasury debt at 34%, together representing 92% of tokenized assets.
Positioning tokenization as a pivotal evolution for capital markets, Atkins called it “the next step” in enhancing efficiency within traditional finance. The SEC’s possible implementation of an innovation exemption could provide critical regulatory space for these initiatives to thrive, potentially enabling scalable growth without falling victim to outdated compliance hurdles.