The U.S. Securities and Exchange Commission (SEC) wants to facilitate tokenized exchange-traded funds (ETFs), according to chairman Jay Clayton. The agency is collaborating with other U.S. regulators to determine how to regulate different crypto products.
SEC Chairman Jay Clayton talked about the commission’s approach to regulating crypto products during a panel discussion hosted by the Chamber of Digital Commerce earlier this month. The event, entitled “Two Sides of the American Coin: Innovation & Regulation of Digital Assets,” also features acting Comptroller of the Currency Brian Brooks.
The SEC is “actively working on regulations that might one day permit crypto versions of ETFs,” the Financial Times reported Friday, citing Clayton. The SEC is collaborating with other U.S. regulators, such as the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), to determine which regulator has jurisdiction over different crypto products.
Clayton pointed out that the utility of the token is what decides which regulator should take the lead. While banking regulators should supervise tokens meant specifically for making payments, such as some stablecoins, Clayton said the tokenization of ETFs should be under the purview of the SEC. Emphasizing that the SEC should and is willing to regulate them, he said:
“Our door is wide open, if you want to show how to tokenize the ETF product in a way that adds efficiency, we want to meet with you, we want to facilitate that. Of course, you got to register it and do what you would do with any other ETF.”
“Tokenisation allows a designated cryptocurrency asset — similar to bitcoin [BTC] — to represent a single security, such as a stock, or a basket of securities, like a fund or an ETF,” the Financial Times explained.
Wisdomtree Investments CEO Jonathan Steinberg said during a separate panel at the same event that tokenized investments are “an opportunity to do something better than the ETF.” Franklin Templeton Investments filed paperwork with the SEC last year for a government money market fund with both traditional and tokenized shares, the publication conveyed.