Last week, a deeper examination was initiated by the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force into the ways in which public blockchain technology can be utilized to facilitate the issuance and exchange of tokenized securities.
The group held separate meetings with Nasdaq, Plume Network, and Etherealize to explore potential methods for issuing and trading securities on public blockchain networks.
All three meetings led participants to propose the concept of a regulatory sandbox.
Nasdaq Pushes for Venues Supporting Digital Assets
Nasdaq executives recommended in the May 21 meeting log that the current registration regulations should continue to govern tokenized shares, bonds, and exchange-traded funds (ETFs).
In addition, Nasdaq executives requested approval to establish a new trading venue called “ATS-Digital,” where firms could list both digital asset investment contracts and commodity-like tokens.
The exchange operator urged regulators to establish a joint safe harbor, in collaboration with the Commodity Futures Trading Commission (CFTC), for digital assets with unclear regulatory classification.
This concept, commonly referred to as a “regulatory sandbox,” would permit issuers to self-certify the classification of their assets while adhering to simplified disclosure requirements. SEC Commissioner Mark Uyeda expressed his support for this initiative in April.
Nasdaq emphasized that tokenization must preserve the safeguards of the national market system. It stressed the importance of balancing liquidity needs with operational risks when transitioning to atomic settlement.
Plume Proposes Regulatory Sandbox for On-Chain Markets
During a meeting on May 22, Arbitrum-based Plume Network informed the SEC that permissionless blockchains offer the most suitable framework for tokenizing real-world assets. The network also proposed creating a regulatory sandbox that incorporates provisions from the 1933 Securities Act and the 1934 Exchange Act.
The agenda put forth by the company includes a request for safe harbor provisions that explicitly take into account the operational dynamics of decentralized finance and the principle of “credible neutrality,” along with mechanisms designed to tailor regulatory requirements for both primary token offerings and secondary trading conducted on-chain.
In their concise meeting summary, Plume requested guidance on tokenizing both U.S. and international equities governed by the Regulation National Market System and other applicable regulatory frameworks.
Etherealize Calls for Reform of Transfer Agent Regulations
Etherealize and the policy firm MetaLeX focused on back-office infrastructure and informed the Task Force that existing transfer agent regulations force issuers to maintain parallel off-chain ledgers, which undermines the operational efficiencies blockchain technology offers.
A transfer agent refers to a financial institution that maintains and updates records of a company’s shareholders.
Industry participants submitted a proposal urging the SEC to formally recognize secure blockchains as legitimate share registries. They also called on the agency to exempt issuers using decentralized tokenization protocols from transfer agent registration and to establish an expedited approval process for agents that handle tokenized securities.
The task force also recommended launching a pilot program to evaluate how effectively smart contract-based alternatives can execute corporate actions such as dividend payments and shareholder voting.
Emerging Consensus
Industry participants repeatedly requested that regulators develop a clear asset classification system, design modular regulatory frameworks, and implement phased pilot programs during the meetings.
Each group proposed technology-specific adjustments and unanimously supported the SEC’s fundamental mandate to protect investors.
The Task Force staff reviewed the materials and signaled that future rule proposals may include sandbox frameworks, specialized trading platforms, and updated obligations for transfer agents.
 Crypto Task Force into the ways in which public blockchain technology can be utilized to facilitate the issuance and exchange of tokenized securities.){kind=link}