US Securities and Exchange Commission Chair Paul Atkins said tokenization could reshape US market structure within a few years. He made the comments in a Fox Business interview with Maria Bartiromo. Atkins described tokenization as the process of turning stocks, bonds, and funds into programmable tokens on distributed ledgers.
He said on-chain settlement can shorten the time between trade execution and final settlement. A shorter window can lower operational and counterparty risk. It can also improve record accuracy and support clearer audit trails.
Atkins linked tokenized markets to greater transparency for investors and regulators. He noted that US markets now settle trades on a T+1 basis. He suggested that blockchain-based systems could move closer to near real-time settlement as technology and rules mature.
He also said tokenization can lower investment minimums by enabling fractional shares. This feature may expand access to assets that often require large starting amounts. It may also improve liquidity in segments that trade infrequently today.
Industry activity appears to support this direction. Exchanges, custodians, and fintech firms continue to run tokenization pilots. The pilots cover equities, bonds, and funds. Policymakers also work on frameworks for issuance, custody, and on-chain trading, which could guide broader institutional participation.
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Atkins said tokenized versions of traditional securities remain subject to existing US securities laws. He stressed that this approach keeps investor protections in place while firms adopt new rails. He also said some digital assets, such as collectibles, commodities, or functional tokens, may not meet the Howey Test standard for securities.
He announced plans for an “innovation exemption” expected next month. The exemption would allow companies to test early token models under defined limits. The SEC aims to move from case-by-case enforcement toward clearer rules that support compliant experimentation.
The SEC has also added privacy-focused tokenization to an upcoming December 15 roundtable. Commissioner Hester Peirce will lead the session, with participation from Zcash founder Zooko Wilcox. The discussion will examine how zero-knowledge tools may support compliant tokenized securities.
Atkins’ timeline highlights the need for networks that can handle low-cost settlement. The XRP Ledger has features that support fast transfers and asset issuance. Moreover, clearer guidance could help firms evaluate whether the XRP Ledger can connect with broker-dealers, trading venues, or post-trade systems.