Blockchain Association Challenges SEC on Tokenized Equities

The Blockchain Association submitted its response to counter arguments that tokenized U.S. equity securities and decentralized finance trading protocols should be regulated as traditional financial intermediaries. Citadel Securities had urged the SEC to treat blockchain infrastructure like exchanges, brokers, and dealers.

The Association’s core argument is straightforward: securities laws regulate intermediaries, not neutral infrastructure. Validators, autonomous smart contracts, and non-custodial software should not automatically become regulated middlemen simply because they support tokenized market operations.

Tokenization represents the digitization of traditional financial assets on blockchain networks, enabling ownership, transfer, and market functions on modern, programmable rails. The Association frames this as the next evolution in market infrastructure, comparable to the 1990s shift to electronic trading.

According to the filing, tokenized markets could deliver faster settlement times, stronger transparency, more resilient infrastructure, and more efficient asset and collateral movement across the financial system. The Association emphasizes two bipartisan policy goals: expanding investment access for ordinary Americans and maintaining U.S. capital market competitiveness globally.

The Association’s position distinguishes between regulating actual intermediaries and regulating the technology layer itself. CEO Summer Mersinger previously testified before Congress on tokenization’s importance, and this filing reinforces that the industry is not seeking regulatory exemptions.

Tokenized securities remain securities under the law. The question, the Association argues, is whether the SEC will apply existing rules in ways that reflect how modern infrastructure actually operates.

The filing notes that the SEC already possesses tools to enable responsible tokenization progress. These include exemptive relief and iterative pathways the Commission has historically deployed when new market structure technologies emerged.

The Association’s broader tokenization workstream aims to establish a clear, workable policy framework that supports innovation while maintaining investor protection standards.

Mersinger stated: Tokenization is about bringing better technology to the most important capital markets in the world. This filing reflects our commitment to advancing tokenization policy and ushering in a market evolution that can make U.S. finance more efficient, more resilient, and more globally competitive.

The filing underscores a critical regulatory choice facing policymakers. The United States can either lead the development of next-generation market infrastructure domestically or watch tokenized markets mature in other jurisdictions. How the SEC responds to this challenge will significantly shape the future of American capital markets competitiveness.