“The private sector should not have to pursue a financial regulator’s endorsement prior to exploring the latest innovation in technologies for a possible way to save the company and consumers money and have a more effective product,” said Hill.
Current regulations require banks to notify federal regulators before trialing any blockchain solution. Rep. Wiley Nickel, D-Calif., expressed concerns that accounting guidance from the SEC, known as SAB 121, could constrain banks’ ability to engage in tokenization. The bulletin requires institutions to track crypto securities held in custody on their balance sheets, potentially implicating tokenized assets.
The discussions surrounding tokenization of real-world assets remain exploratory, with lawmakers focusing on the technology’s risks and rewards rather than formal regulatory proposals. The debate underscores the complexities of integrating blockchain into traditional financial systems and the need for a balanced regulatory approach.
