SEC Commissioner Peirce: ‘Come and talk to us about tokenization’

The financial world is rapidly focusing on tokenization. Banks and large institutions see it as the way to make markets more efficient and to create more liquidity. Nevertheless, technology raises important questions: how does a tokenized share relate to a traditional share? Supervisors emphasize that this discussion has not yet been completed.

Peirce invites companies for dialogue

During the Digital Assets Summit in Singapore, SEC commissioner Hester Peirce announced that the American stock market watchdog is open to conversations with companies that want to topping their products. “We are willing to work together with people who want to token, we call on them to talk to us,” she said.

In the case of tokenization, property rights, for example in shares or bonds, are recorded on the blockchain. As a result, the same share can exist in paper form, and electronic certificate and as a blockchain token. According to Peirce, it is crucial to understand how those different variants function side by side.

“It includes the question of how a tokenized effect cooperates with other forms of the same effect,” she said. Because the legal status and operation can vary greatly per design, Peirce argues for a nuanced approach.

Explosive growth of Tokenized Assets

In the meantime, the market is growing rapidly. According to RWA.XYZ, the total value of Tokenized Assets is now $ 31 billion. Of these, $ 714 million consists of tokenized stocks. Analysts from McKinsey expect that the market value can rise to around 2 trillion dollars by 2030.

In addition to Stablecoins, tokenization is one of the few applications in the crypto world that is already being widely used. Large financial institutions use it to wrap trade faster and cheaper.

Nevertheless, it remains uncertain whether legislators can keep up with this pace. If tokenization actually has a permanent place in the financial markets, it can lead to a fundamental shift in the way in which capital is traded worldwide.