Commissioner Uyeda says SEC rules shouldn't create 'unnecessary roadblocks' as tokenization advances

U.S. Securities and Exchange Commission Commissioner Mark T. Uyeda offered new insights into the agency's approach to tokenization, framing blockchain-based securities as a modernization challenge rather than a regulatory rupture.

In a Monday speech at the Asset Management Derivatives Forum, Uyeda said tokenization has moved beyond theory and into early-stage reality, with market participants now testing how traditional securities can be issued, held, and transferred onchain. 

The SEC’s task, Uyeda argued, is not to invent a parallel rulebook for crypto-native assets, but to translate existing securities laws into onchain environments without unnecessary friction.

"Tokenized versions of securities remain subject to securities regulation," Uyeda said, adding that technological advancements do not alter core legal obligations around disclosure, custody, and investor protection.

"Market demand and confidence should drive whether tokenization becomes reality, and the SEC's rulebook should not impose unnecessary roadblocks," Uyeda added.

The commissioner's remarks build on the SEC's evolving policy toward crypto assets. Last month, the agency clarified that tokenized securities remain subject to existing securities regulations, and that these onchain assets continue to fall under the agency's remit and carry similar registration, disclosure, and other obligations.

'Practical reality'

Uyeda noted that the SEC has recently provided public notice of an exemptive application under the Investment Company Act — a development he characterized as evidence that "tokenization is no longer a theoretical exercise, but is becoming a practical reality." 

The application cited by Uyeda relates to an exemptive application from WisdomTree Digital Trust and affiliated entities seeking relief under the Investment Company Act to permit affiliated dealers to trade shares of a "Rule 2a-7" money market fund with investors — a setup that could support tokenized fund distribution models.

"By moving forward with such applications, the Commission signals that it is open to modernization, provided that it adheres to achieving the objectives of longstanding laws and regulations that govern the securities markets," Uyeda said.

Uyeda also said that the SEC's commitment to "technology-neutral" rulemaking focused on outcomes rather than specific processes. He acknowledged that many existing SEC rules assume multi-layered intermediation structures that tokenization could bypass, enabling more direct issuer-investor interactions on "open, programmable rails."