Hester M. Peirce said in a statement Wednesday that digital versions of stocks are still subject to federal securities laws.
The head of the Securities and Exchange Commission’s cryptocurrency task force said on Wednesday that efforts to “tokenize,” or create digital versions of stocks and other securities, are still governed by federal securities laws.
“Tokenized securities are still securities,” Hester M. Peirce, who is also an S.E.C. commissioner, said in a statement, and “market participants must consider — and adhere to — the federal securities laws when transacting in these instruments.”
Ms. Peirce’s statement is not official S.E.C. policy. But as a longstanding commissioner and leader of the crypto task force, her positions carry a good deal of weight at the regulatory agency. Ms. Peirce was nominated to the S.E.C. by President Trump during his first administration.
A tokenized stock is a digital version of the security that, rather than being tied to a particular stock exchange, can be traded on a blockchain at any time. A blockchain is a digital ledger that, in theory, records all transactions involving cryptocurrencies or other digital assets and is maintained on a network of computers.
The statement from Ms. Peirce, a longtime crypto proponent, comes as some in the crypto industry are pushing to permit investors to trade digital versions of stocks and other assets on their platforms in Europe and the United States. Some critics have worried that the tokenization of assets like shares in private companies that can be traded on the blockchain might mean those digital assets are not subject to federal securities laws.
Ms. Peirce, whose commission recently held a hearing on the issue of tokenization, has long argued that regulators should keep an open mind about new technologies. But in her statement she said crypto companies also needed to be mindful of securities laws.
