The U.S. Securities and Exchange Commission (SEC) is exploring an “innovation exemption” framework to accelerate the development of blockchain-based products and services, according to Acting Chair Paul Atkins. The initiative aims to balance regulatory oversight with technological innovation.

During a crypto industry roundtable titled “DeFi and the American Spirit,” Atkins announced that staff members have been directed to examine a conditional exemption relief approach. These temporary regulatory exceptions would allow firms to develop new blockchain applications while meeting specific criteria.

Accelerating On-Chain Innovation

The proposed exemptions would relieve companies from certain regulatory burdens to foster innovation in emerging technologies. Atkins stated that these measures would speed up the market introduction of blockchain products while the SEC evaluates permanent regulatory changes.

“An innovation exemption could help fulfill President Trump’s vision to make America the crypto capital of the planet by encouraging developers and firms to innovate with blockchain technologies,” Atkins said.

Source: SEC Roundtable Discussion

Atkins emphasized that most current securities regulations were designed for traditional issuers and intermediaries that predate blockchain technology. He acknowledged that regulators need to adapt as self-executing software potentially replaces traditional intermediaries.

SEC’s Evolving Crypto Framework

The agency’s Crypto Task Force, established in January, is working to develop a comprehensive regulatory approach for cryptocurrency and blockchain technology. Atkins previously told lawmakers the SEC is shifting toward “notice and comment” rulemaking rather than court-based approaches.

Since Chair Gary Gensler’s administration ended in January, the SEC has taken a more conciliatory stance toward blockchain innovation, closing several long-running enforcement cases against crypto firms.

“The drafters of current rules likely did not contemplate that self-executing software code might displace traditional issuers and intermediaries,” commented Atkins.

Source: SEC Roundtable Discussion

New Regulatory Approach

Atkins has been critical of the Gensler administration’s litigation-heavy approach to crypto regulation. The SEC has recently issued guidance stating that most common staking activities don’t violate securities laws and provided clarity on how traditional securities rules apply to cryptocurrency.

The agency’s Crypto Task Force plans to release its first formal report in the coming months, outlining a comprehensive framework for regulating blockchain innovation while protecting investors.