The agency may be weighing the difficulty the industry might have experienced while waiting for rulemaking and that granting temporary exemptions would be sturdy enough that they’re not practical to overturn. Daugherty argued that a future commission would be hard-pressed to reverse policies “that would destroy the economic value created by the new products and services, once introduced and seasoned for a while.”
Tokenization — the concept of turning traditional assets into tokens that can be transacted on blockchains — is where much of the crypto-world momentum is currently centered, and its advocates say it’ll revolutionize trading by offering 24/7 activity, elimination of some intermediaries and instant completion of transactions.
As agency staff crafts its innovation exemption, which has been said to be poised for release for several months, the SEC has to work out its stance on tokens generated by third parties (without ties to the issuance of the underlying securities), how purchasers may be identified in secondary sales and generally how the tokens that are representing securities will carry shareholder voting abilities, dividend rights and security measures.
The aim of blockchain advocates is that this SEC policy push will give traditional financial firms and institutional investors the confidence to engage in earnest with the new products, opening the financial floodgates. For some, a pure agency action without backing from a new law, such as the Clarity Act, may not be enough.
