The U.S. House of Representatives held hearings on securities tokenization, and the SEC is preparing to introduce an innovation exemption program.

The U.S. House Financial Services Committee held a hearing on Wednesday entitled "Tokenization and the Future of Securities: Modernizing Capital Markets." Republican Representative Andy Barr stated that securities tokenization is inevitable and the U.S. needs to modernize its regulations while balancing investor protection and innovation. The SEC has previously authorized several entities to conduct tokenized securities business. Last December, the SEC authorized the DTCC to tokenize certain highly liquid assets on pre-approved blockchains for a three-year period. Subsequently, the New York Stock Exchange announced it was developing a trading and on-chain settlement platform for tokenized securities, and the SEC also approved a rule change allowing Nasdaq to support tokenized stock trading. SEC Chairman Paul Atkins stated that the agency will seek public comment on a range of related issues, including an innovation exemption proposal that could provide a regulatory sandbox for on-chain assets. Some lawmakers expressed concerns. Democratic Representative Brad Sherman worried that this move could create a two-tier market, allowing tokenized securities on blockchain platforms to bypass core securities regulations. Committee senior Democrat Maxine Waters cited lessons from the 2008 financial crisis and pointed to the conflict of interest arising from President Trump's approximately $1.4 billion profit from his crypto business. SIFMA Chair Kenneth Bentsen, Jr. emphasized the need to advance innovation within existing legal and regulatory frameworks, while Blockchain Association CEO Summer Mersinger warned that without clear regulation, innovation will continue to shift overseas.