SEC Considers Innovation Exemption for Tokenization

Bloomberg reports that the incoming head of the U.S. Securities and Exchange Commission (SEC), Paul Atkins, is considering creating an innovation exemption within the regulatory framework to foster tokenization.

Atkins announced his comments during a press event on Friday, stating that SEC staff is exploring changes aimed at promoting tokenization, including a new exemption that would allow innovative trading methods while providing targeted relief to support a tokenized securities ecosystem.

Atkins remarked, “If it can be tokenized, it will be tokenized.” While acknowledging uncertainty about the specifics, he expressed optimism regarding the industry’s future.

GENIUS Act Advances Amid Crypto Regulatory Shift

Friday’s developments followed Thursday’s passage of the GENIUS Act by the U.S. House of Representatives, alongside the Digital Asset Market Clarity (CLARITY) Act and the Anti-CBDC Surveillance State Act.

Atkins’ pro-crypto stance contrasts with his predecessor, Gary Gensler, with the new head stating that blockchain technology represents a transformative opportunity for the nation’s financial infrastructure.

Having previously referred to stablecoins as a concern for regulatory clarity (despite SEC rulings against the classification), Atkins now asserts that banking regulators will oversee them, seeing this as appropriate.

The legislation will reach President Donald Trump’s desk, with an effective date of 18 months or 120 days after implementing regulations are issued.

Divided Views Emerge on Regulatory Changes

Ethereum developer Eric Conner characterized the legislation as “the clearest signal yet that DeFi is winning the regulatory argument.”

Atkins acknowledged concerns about stablecoin reserves but added that the new bill clarifies they are not securities. Noting the legislation’s impending passage, he underscored the importance of proper oversight.

Despite support from crypto advocates, former Representative Elizabeth Warren criticized the legislation during a press event Thursday, deeming it insufficient to protect consumer interests and calling out risks like market manipulation and fraud.

SEC Caution Regarding Crypto Retirement Plans

In Friday’s interview with Bloomberg, Atkins emphasized the importance of disclosures related to investments, stating “The government should not stand as a blocking agent for those sorts of things, but we need to enable it in the proper way with proper guidelines and proper disclosures.”