SEC Chair: Considering an 'innovation exemption' for tokenized securities

Paul Atkins, chair of the U.S. Securities and Exchange Commission (SEC), said the agency is considering introducing an “innovation exemption” framework that would temporarily defer certain regulations for a set period to spur innovation in digital assets (cryptocurrencies).

Speaking alongside SEC Commissioner Hester Peirce at the “ETHDenver 2026” event held in Denver, Colorado, on the 19th (local time), Atkins said, “We are considering innovation-exemption measures to help traditional financial institutions and digital-asset specialist firms experiment with tokenized securities on-chain.”

The core of the exemption would be a temporary easing of existing rules so that tokenized securities can trade on public-blockchain automated market makers (AMMs) or decentralized liquidity platforms. Safeguards would include volume caps and whitelists, and the measures are expected to apply on a time-limited basis until the SEC puts in place longer-term, tailored regulation.

Atkins emphasized, “Investors may prefer transacting through intermediaries, or they may want to use decentralized applications (dApps) directly,” adding, “That is for investors—not the SEC—to decide.”

The SEC is also pursuing a range of policies to reduce uncertainty in the digital-asset market. Atkins said that over the coming weeks or months the agency plans to: ▲publish a Commission framework for digital assets that qualify as investment contracts ▲propose reasonable guidelines for capital raising ▲issue no-action guidance on wallets and user interfaces (UI) ▲develop rules for broker-dealers’ custody of non-security digital assets. He added that through “Project Crypto,” a joint initiative with the Commodity Futures Trading Commission (CFTC) led by Chair Mike Selic, the two agencies will pursue unprecedented regulatory alignment and the drafting of joint rules.

On the recent declines in prices of major digital assets such as Bitcoin, Atkins drew a line, saying, “Worrying about day-to-day market volatility is not the job of regulators.” He said, “Our role is to foster a transparent disclosure environment so that market participants can make informed investment decisions,” signaling he would not overreact to price drops. Peirce likewise said, “There will be no deregulation simply to push prices higher,” adding, “What matters is building real value that people truly want and need.”

In closing, Atkins addressed market concerns by saying, “Our rules should not become barriers to innovation,” and stressed, “We won’t blindly favor any particular asset or technology, but markets should always remain open to those seeking to offer new products and services.”