Chairman Jay Clayton of United States’ Securities and Exchange Commission (SEC) mentioned in a panel discussion the plan of facilitating tokenized exchange-traded funds (ETFs) moving forward to regulate crypto products in the market.
Cryptocurrency has remained popular over the years, making it one of the most convenient platforms used by businessmen to conduct hassle-free transactions. Due to its high demand, different states across the globe saw the opportunity of leveraging on cryptocurrency that can be efficient in the upcoming years.
During the Chamber of Digital Commerce’s event called ‘Two Sides of the American Coin Innovation & Regulation of Digital Assets’, SEC Chairman Jay Clayton tackled the current status of the regulation during the panel discussion. He stated that the SEC is, ‘actively working on regulations that might one day permit crypto versions of ETFs.’
He also mentioned that the organization is collaborating with other agencies in the country to fasten the process of this endeavour. Some of them include the Commodity Futures Trading Commission (CFTC), Office of the Comptroller of the Currency (OCC) and other U.S. regulators. They work hand in hand to determine which authority will handle the jurisdiction over different crypto products.
The chairman also mentioned that the appointed regulator depends on the utility of the token in which he added, ‘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.’
By tokenisation, it allows cryptocurrency as a form of legal asset that can represent securities such as stocks and other fund sources. Meanwhile, CEO Jonathan Steinberg of Wisdom Investments mentioned that facilitating tokenized investments is, ‘an opportunity to do something better than the ETF.’ Even Franklin Templeton Investments shared they filed a government money fund with SEC from the previous year in terms of traditional and tokenized shares.
Since using electronic gadgets are a trend nowadays and accomplishing transactions through digital means, Clayton mentioned that it would be easier to use cryptocurrency as another platform for exchanging funds. He stated, ‘It may be very well the case that those all become tokenized, but you have to stay true to the principles.’
Despite the good news, he also mentioned that they experienced difficulties during the first year of implementation, ‘One of the problems that we had was we got off on the wrong foot in this innovation. I think now, three years later, four years later, we are in a much better spot.’
He also mentioned during the panel discussion that Brooks and him have been considering how to describe the word ‘security’ efficiently. He mentioned that if the entity plans to finance the network by not providing their people a return, then that isn’t what security is all about. However, he cleared that security is, ‘if you are trying to finance the build out of your network with your token or provide people with a return for using the network with your token, it’s pretty clear, it’s a security.’
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