The SEC Chairman emphasized the potential of DLT technology in the financial sector, stating, "Tokenized securities are also subject to federal securities law."

Paul Atkins: "Turnoff to a T+0 settlement threshold reached"… Regulatory coordination with CFTC underway.

U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins has reaffirmed his position that federal securities laws apply to tokenized securities.

“Distributed ledger technology (DLT) offers many potential benefits to the financial services industry,” Atkins said on the All-In Podcast on the 12th. “We are now at the threshold of being able to achieve T+0 settlement, or near-instant delivery and settlement.”

"Payments will be possible using on-chain digital assets," he said, adding that "this is very exciting, but some safeguards may be needed to prevent fraud and other issues."

Chairman Atkins also addressed the challenges of the new technological environment. "There are liquidity issues," he said. "One of the questions we need to address is what the concept of best bid and ask prices in traditional markets means in this new system."

He clarified the SEC's regulatory principles: "If an asset is inherently a security, even if it's tokenized, it remains a security and is subject to federal securities laws," he said. "However, regulators have a responsibility to ensure that our rules truly apply to new, real-world uses."

"As the purpose of transactions and delivery methods change, we must adjust accordingly," said Chairman Atkins. "We are currently reviewing each regulatory rule one by one and working to adapt our system to the development of emerging technologies."

He also explained the current regulatory coordination with the Commodity Futures Trading Commission (CFTC). He distinguished between tokenized securities, which fall under the SEC's regulatory framework, and digital currencies, digital tokens, digital instruments, or digital collectibles, which fall under the CFTC's regulatory framework.

Joohoon Choi joohoon@blockstreet.co.kr