DTC no-action letter and innovation exemption plans mark pivot to pro-tokenization stanceDTC no-action letter and innovation exemption plans mark pivot to pro-tokenization stance

SEC Chair Atkins Signals Regulatory Shift Toward Onchain Markets

2025/12/15 15:39
SEC Chair Atkins Signals Regulatory Shift Toward Onchain Markets

SEC Chair Paul Atkins is positioning the regulator as an innovation-first agency focused on enabling blockchain-based capital markets, signaling a shift in regulatory approach that could accelerate institutional tokenization efforts.

In a series of posts on X, Atkins said U.S. financial markets are "poised to move on-chain" and declared the SEC is prioritizing innovation while embracing new technologies to facilitate this transition. The comments came alongside the Division of Trading and Markets issuing a no-action letter to the Depository Trust Company for its securities tokenization pilot program.

The DTC pilot allows participants to transfer tokenized securities directly to registered wallets of other participants, with DTC tracking transfers on its official records.

Atkins characterized the program as "an important step towards on-chain capital markets" that will deliver greater predictability, transparency, and efficiency for investors.

But Atkins went further, indicating the no-action letter is merely the opening move in a broader regulatory pivot. He said he looks forward to the SEC considering an "innovation exemption" that would allow market participants to transition markets on-chain using new technologies and business models without facing what he called "cumbersome regulatory requirements."

The regulatory green light for blockchain-based settlement infrastructure and Atkins' public endorsement of onchain markets provide significant tailwind for tokenization projects. His explicit promise to pursue innovation exemptions suggests the SEC is preparing to dismantle regulatory barriers that have slowed adoption of blockchain technology in traditional finance.

The statement represents a clear departure from the SEC's previous posture under former chair Gary Gensler, who took an enforcement-heavy approach to crypto. Atkins' emphasis on enabling experimentation and reducing regulatory friction suggests the agency is now viewing tokenization as a priority rather than a risk to be contained.

Commissioner Hester Peirce reinforced the message in a separate statement, describing DTC's tokenization model as a "significant incremental step in moving markets onchain." She emphasized the SEC's crypto work is "iterative" and welcomed continued innovation from market participants exploring alternative tokenization structures.

Peirce noted some issuers have begun tokenizing their own securities, potentially making it easier for investors to hold and transact directly rather than through intermediaries. She cautioned that different tokenization models may raise distinct regulatory considerations but stressed the importance of investor choice during this experimental phase.

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