On August 25, Kraken presented its tokenized trading plan to the SEC's Crypto Task Force, discussing system architecture and legal frameworks.
Kraken Brings Tokenized Trading Blueprint to SEC
During the meeting with the SEC, Kraken outlined key aspects of a tokenized trading system design. The company highlighted three main topics: system architecture, legal framework, and potential benefits of tokenization, such as enhanced access to financial markets and supporting capital formation. Notably, tokenization currently represents assets valued at over $26 billion.
Can 1930s Securities Law Handle Blockchain Trading?
Kraken also examined how a tokenized trading system would fit within existing U.S. securities law, given that many regulations were written for paper certificates. Discussions included the Securities Exchange Act of 1934 and its application to systems matching buyers and sellers of tokens. Additionally, issues regarding custody compliance were addressed.
Fractional Access Opens Doors to New Investors
The third agenda item focused on the speed of settlements and access for investors. A tokenized system could significantly reduce settlement time, while fractionalization of assets allows a broader pool of investors to participate in capital formation processes.
Kraken's meeting with the SEC marks a significant step towards integrating tokenized trading into the existing U.S. financial system. Future regulatory decisions will determine the pace of development and implementation of these systems.
