Federal lawmakers on Wednesday debated the regulation of tokenization, the process of placing real-world assets like stocks and bank deposits on blockchain, during a House hearing. The discussion highlighted similarities to the regulation of cryptocurrencies, focusing on balancing potential efficiencies against threats to privacy and consumer protection.
French Hill, R-Ark., chairman of the subcommittee on financial technology, emphasized the intention to separate tokenization discussions from ongoing digital assets regulation efforts. However, dialogue about recently passed crypto bills and their implications on tokenized assets was unavoidable, given the technology’s close ties to the crypto industry.
“Unlike cryptocurrencies, which are generally assets that exist in novel markets, tokenization refers to the use of distributed ledger technology to improve the delivery of real-world assets such as bank deposits, bonds, and other regulated financial instruments,” said Robert Morgan, CEO of the USDF Consortium.
