US SEC Chief Executive: Global Financial On-Chain Implementation is Just Around the Corner

This article is from:FOX

Compiled by Odaily Planet Daily ( @OdailyChina ); Translated by Azuma ( @azuma_eth )

Editor's Note: On December 3, Paul Atkins, Chairman of the U.S. Securities and Exchange Commission, gave an exclusive interview to Mornings with Maria, a segment of the financial media outlet FOX, at the New York Stock Exchange. During the interview, Atkins told FOX reporter Maria Bartiromo that he expects the entire U.S. financial market to migrate to blockchain within the next few years.

Since officially assuming the chairmanship of the SEC on April 22nd of this year, Paul Atkins has repeatedly signaled positive developments regarding cryptocurrency regulation. He has explicitly stated that his core priority during his term is to establish a sound regulatory framework for the crypto asset market, develop clear rules for the issuance, custody, and trading of cryptocurrencies, and continuously curb illegal activities. (See also: " What Signals Did the New SEC Chairman's First Crypto-Themed Speech Reveal? " and "The New SEC Chairman Issues Multiple 'Get-Out-of-jail-Free Cards,' Is Another Spring for DeFi Coming? ")

The following is the full text of the Atkins interview, translated by Odaily.

Interview Transcript

Opening Remarks: The SEC is working on new rules and reforms to enhance economic security and diversify investment. SEC Chairman Paul Atkins further elaborated on this vision in an interview with the NYSE.

• Maria: Mr. Chairman, thank you very much for accepting our interview.

Atkins: Thank you, Maria. It was a pleasure meeting you today.

• Maria: It's been over 30 years since I first came to the NYSE and became the first person to broadcast live from the New York Stock Exchange. In those 30 years, we've seen tremendous changes. So how are the U.S. capital markets different today compared to 30 years ago?

Atkins: The changes have been nothing short of revolutionary. Clearly, electronic innovation and data processing technologies have rendered traditional manual trading floors and operating methods obsolete. Everything is now electronic. Interestingly, 30 years ago I was a young employee at the SEC, and this is my third time working there.

In the early 1990s, you might find it hard to believe, but retail investors held more than half of the total market capitalization of listed companies. Now, of course, things are completely different… Individual investors hold assets more indirectly through pension funds, ETFs, mutual funds, and other vehicles, but they remain a crucial part of the market. Retail investors are still very important. But the entire landscape has changed. Markets are now faster, more dynamic, and clearly globalized. The next wave of change will come from digital assets—the digitization and tokenization of the market. I believe this will significantly reduce risk and increase predictability through on-chain transparency, leading to enormous benefits.

• Maria: Please elaborate on the concept of tokenization. What does it mean for investors to shift from directly holding stocks or investing through index funds and ETFs to holding tokens representing a portion of a company's equity? What is the development path?

Atkins: Tokenization uses smart contracts or on-chain tokens to represent some underlying security. Tokenized securities are still securities in nature and therefore must comply with SEC laws.

The core advantage of tokenization lies in the fact that if assets exist on the blockchain, the ownership structure and asset attributes will be highly transparent. Currently, listed companies often do not know who their shareholders are, where they are located, or where their shares are held.

Tokenization also promises to enable "T+0" settlement, replacing the current "T+1" transaction settlement cycle. In principle, on-chain Delivery Payment (DVP)/Receipt Payment (RVP) mechanisms can reduce market risk and improve transparency, while the time difference between current clearing, settlement and fund delivery is one of the sources of systemic risk.

• Maria: Do you think this is an inevitable trend in financial services? Are mainstream banks and securities firms already moving towards tokenization?

Atkins: Absolutely. It might not even take 10 years…maybe a few years. I think market modernization is positive, but the problem is that in recent years the SEC has reversed its historical trend—historically, while not always a pioneer of innovation, it at least followed the market closely, but in recent years it has almost been at odds with market innovation. This situation must end. We are actively embracing new technologies to ensure the United States remains at the forefront in areas such as cryptocurrencies.

Times have changed. We need to introduce new technologies into the country and allow them to develop under US regulations. The FTX collapse did not affect segregated customer accounts protected by CFTC rules—a perfect example of how good regulation protects investors.

• Maria: What specific impact will this have on the work of the SEC?

Atkins: We have renamed the original “Crypto Task Force” to “Project Crypto”.

A few weeks ago, I gave a speech proposing a new classification framework to clarify which assets qualify as securities. Tokenized securities clearly fall under the category of securities, while digital goods, digital instruments, and digital collectibles do not. We will continue to follow the Howey Test established by the Supreme Court in 1946 to define securities.

Meanwhile, we plan to launch an "innovation exemption" policy next month, allowing companies to conduct proof-of-concept trials within controllable timeframes, user numbers, and funding limits, before commercializing their products after obtaining explicit SEC approval. We must provide investors with a clear compliance framework and innovators with a certainty-based environment for product development.

• Maria: Have we had enough discussions about cryptocurrency legislation? There are already clear rules for stablecoins. Will the legislation for digital assets be similar, or different?

Atkins: The Genius Act has passed, which is a very good first step and marks the first time the United States has formally recognized a digital product (stablecoin). We appreciate Congress's passage and the President's signing. Currently, the Clarity Act, a market structure bill, has also passed the House of Representatives and is awaiting further action from Congress.

At the same time, the SEC and CFTC are actively coordinating their regulatory frameworks. Long-standing disagreements between the two agencies have caused numerous potential products to fail due to regulatory constraints. We must work together. The CFTC has expertise in the futures and derivatives markets, while the SEC is well-versed in the spot markets; there is no reason for them not to collaborate . I believe that cooperation will make the market more efficient and safer.

• Conclusion: This concludes Atkins's remarks. FOX internal analysts subsequently provided supplementary comments, mentioning T+0 settlement, asset democratization, and Larry Fink's recent views (he just published an article on tokenization in The Economist ).