The recent meeting between Kraken representatives and the U.S. Securities and Exchange Commission (SEC) marks an important step in regulating tokenized assets.
Discussion of Tokenization at the SEC Meeting
The SEC recently held a meeting with Kraken to examine tokenized trading systems. The discussion focused on transforming traditional financial assets using blockchain technology. Kraken outlined proposals to tokenize stocks, bonds, and commodities while adhering to financial laws. The meeting confirmed the SEC's interest in the structure and implications of tokenization.
Expansion of Kraken's Services and Regulatory Response
Kraken launched its tokenized stock service on May 22, targeting non-U.S. investors with 24/7 access to U.S. equities. This allows trading of tokenized stocks outside traditional market hours. However, traditional exchange associations have urged the SEC to impose stricter regulations on tokenized stocks, stating that many protective measures are lacking in existing systems.
Outlook and Risks of the Tokenized Market
Tokenized assets are still in their early stages, but their growth potential is immense. The total value of any tokenized stock is estimated to be around $360 million, which is 1.35% of all tokenized Real World Assets (RWAs). With 65% of respondents in a Kraken survey believing that crypto-assets can outperform stocks in the next decade, the SEC's engagement with Kraken may provide the necessary clarity to boost investor confidence.
The meeting between Kraken and the SEC could be a turning point for tokenized assets and their market. Improved regulation may attract more investors and enhance the liquidity of tokenized products.
