SEC Considers ‘Innovation Exception’ to Drive Asset Tokenization After GENIUS Act Passage

Following the House’s passage of the GENIUS Act, SEC Chair Paul Atkins discloses that the commission is exploring an innovation exception to promote asset tokenization. During a press event, as reported by Bloomberg, Atkins noted that the SEC is currently exploring possible ways, including an innovation exemption, to incentivize asset tokenization within its regulatory framework.  Under the exception, the commission could grant “novel trading models and narrowly-tailored regulatory waivers,” potentially facilitating the development of a fully tokenized securities ecosystem.  SEC to Accommodate Asset Tokenization, Not Block It The potential innovation exemption comes on the heels of financial institutions eyeing the tokenization of popular U.S. stocks. For instance, Robinhood recently introduced tokenized versions of over 200 U.S. stocks, including Nvidia, Microsoft, and Apple, for its European users.  Notably, Atkins acknowledged the recent trend, noting that it is evident that traditional assets are moving onto the blockchain. Amid this development, the SEC is considering an innovation exception rule that will accommodate and support tokenization rather than blocking it.   He emphasized that as long as an asset can be tokenized, it will be tokenized, suggesting that the commission would encourage this innovation.  Atkins Praises GENIUS Act Passage  Meanwhile, the SEC chair commended the passage of the crypto-related legislation, specifically the GENIUS Act. Notably, the GENIUS stablecoin bill received bipartisan support in the House yesterday, with 102 Democrats crossing party lines to vote in favor of it.  Overall, the regulation passed in a vote of 308-122 in favor of it. President Donald Trump is expected to sign the GENIUS Act into law today at 2:30 p.m. (ET). Ahead of this historic event, the SEC Chair said he is eager for the president to sign the stablecoin legislation.  He believes that once the legislation is enacted, it will be an essential step forward for the markets and innovators. Atkins suggested that the stablecoin legislation could also streamline payments in the broader financial ecosystem. He also believes the stablecoin law will play a crucial role in making the United States the leader in crypto.  Since becoming SEC chair, Atkins has adopted a more lenient approach toward regulating the crypto industry. His approach contrasts with that of his predecessor, Gary Gensler, who many widely criticized for regulating the sector primarily through enforcement.  Meanwhile, Atkins reiterated that the SEC is committed to establishing clear rules for the crypto market.