SEC Commissioner Hester Peirce: Institutions Exploring Tokenization Welcomed to Proactively Communicate with Regulators

Odaily News: U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce stated that regulators are open to companies exploring asset tokenization and novel exchange-traded product structures, and encouraged relevant institutions to proactively engage with the SEC.

During an interview on CNBC's program "The Exchange," Peirce noted that as the market matures, the SEC hopes institutions developing innovative financial products—including those launching tokenized financial instruments—will communicate directly with regulators. "The most important thing is 'come talk to us about what you want to do.' We want to work with the industry to give the market a chance to test whether there is genuine demand for these new products."

She pointed out that many asset management firms are currently exploring how to package crypto assets or blockchain-based securities into traditional investment vehicles, such as exchange-traded funds (ETFs).

Peirce also addressed the SEC's recent focus on high-leverage ETFs. She emphasized that the SEC is not a "value-judging regulator" and does not determine whether a product is a good investment, but rather ensures it complies with relevant legal requirements and fully discloses risks.

She mentioned that existing regulations impose certain limits on fund leverage levels, but issuers may still propose different design structures if they can demonstrate that the product framework aligns with securities laws. Currently, as some institutions attempt to launch ETF products with leverage exceeding three times, regulatory attention in this area is increasing.