Senate committee and SEC chair push for "clarity" on digital assets and tokenization
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Summary
Senators and SEC Chairman Paul Atkins pushed for congressional legislation to define the regulatory boundary between the SEC and CFTC, adopt a token taxonomy, and enable tokenized securities and sandboxes so U.S. firms can compete globally while maintaining investor protections.
SEC Chairman Paul Atkins told the Senate Committee on Banking, Housing, and Urban Affairs that Congress's market-structure and crypto bills are "vital" to give investors and innovators certainty in digital-asset markets. "A federal framework for crypto markets is long overdue," Atkins said in opening testimony, and he said the SEC has provided technical assistance to both chambers as legislation is drafted.
The chairman outlined three priorities aimed at making equity markets more accessible to smaller firms: re-anchoring material disclosures, depoliticizing shareholder meetings, and offering litigation alternatives to shield innovators from frivolous suits while protecting investors. He repeated that tokenized securities are securities under existing law and that the agency will treat them as such, but said a statute would "future proof" markets and reduce regulatory ambiguity between the SEC and the Commodity Futures Trading Commission (CFTC).
Committee members from both parties urged statutory clarity. Chairman Scott said legislation such as the Senate's Clarity Act and the Empowering Main Street in America Act would "establish clear rules of the road for digital assets" and help keep innovation in the United States. Senators emphasized the need for a token taxonomy, protections for token holders to ensure tokenized securities carry the same rights as traditional securities, and guardrails for "super apps" that might offer side-by-side trading of crypto and traditional assets.
Atkins described ongoing coordination with CFTC Chairman Mike Selig and staff-level meetings to harmonize approaches on overlapping markets. He also said the SEC's cross-agency project on crypto aims to consider exemptions that would allow certain on-chain activity while proposing a token taxonomy to clarify obligations for market participants.
Several senators supported regulatory sandboxes and innovation exemptions. Atkins endorsed a sandbox-like approach that is "cabined, time limited, transparent, flexible, and focused on investor protection," saying it could allow entrepreneurs to "prove their concept" without immediate full-scale regulatory burdens.
The hearing closed with senators urging prompt congressional action to codify roles and fix perceived gaps. The committee asked members to submit written questions for the record by Thursday, February 19; Chair Atkins was allotted 45 days to respond.