- SEC’s Peirce declares tokenized stocks remain securities under existing laws despite blockchain use, citing hacking risks to token-stock links.
- Exchanges control tokenized stocks mimicking share prices; investors get tokens not real shares, traded via crypto wallets.
SEC Commissioner Hester Peirce, who leads the agency’s crypto-focused unit, addressed tokenized stocks. She stated these must follow existing regulations.
Peirce clarified several points
Tokenized stocks trade on specific platforms. Each token aims to match the price of one share in a company. However, investors buy tokens representing shares. They do not own actual company stock. The trading platforms control these tokens. These platforms claim the tokens equal the real stock price.
Peirce offered her personal view. She said blockchains provide different ways to handle stocks. But these methods are not exempt from SEC rules. The Commissioner identified risks for investors. One example is a hack damaging the link between a token and the real stock it follows.
Crypto companies like Robinhood and Coinbase want SEC approval to offer these tokens. Robinhood specifically wrote to the SEC. Their letter highlighted possible benefits. Peirce’s opinion does not state the SEC’s official position. Despite this, some investors choose tokenized stocks. They use their crypto wallets for trading.
Furthermore, SEC Chair Paul Atkins favors the crypto sector. He mentioned creating rules to simplify processes for crypto firms. This does not lessen the relevance of current securities laws. The goal is reforming rules to suit digital assets. Yet the core legal structure must stay.
Coinbase waits for clearer rules before offering tokenized stocks
Peirce supports new financial tools generally. But she disagrees with tokens tied to real stocks. Coinbase sees a chance in this area. They aim to use crypto methods for stock trading. Big banks and investment firms also take a careful approach to this matter. Their main concern involves unexpected problems with the token model tied to real stocks.
