Why it Matters
The House Financial Services Committee is convening a full-committee securities tokenization hearing on March 25 at a moment when regulators are already moving — fast — to reshape how stocks and bonds trade in America. The SEC just approved Nasdaq's plan to settle trades as blockchain-based tokens. Federal banking agencies cleared the way for banks to hold tokenized assets without extra capital charges. And the SEC is weighing a new "innovation exemption" that could let certain tokenized securities trade outside traditional settlement rails. Congress is now stepping in to decide whether it will lead, follow, or try to pump the brakes on a transformation of capital markets that is already underway.
The stakes extend well beyond crypto enthusiasts. Tokenization of securities — the process of representing stocks, bonds, and other financial instruments as digital tokens on a blockchain — could fundamentally alter how Americans invest, how companies raise capital, and how the plumbing of Wall Street operates. It could also introduce risks that regulators and investors don't yet fully understand.
A Cascade of Regulatory Action
The two weeks before the hearing produced a remarkable cluster of federal activity on tokenized securities regulation, giving the committee plenty to interrogate.
March 18: The SEC approved Nasdaq's proposal to allow certain securities to trade in tokenized form, a milestone in integrating blockchain into U.S. equity markets. Nasdaq partnered with crypto exchange Kraken to distribute tokenized stocks globally. Separately, Intercontinental Exchange, which owns the NYSE, invested in crypto exchange OKX with plans to launch tokenized stocks and crypto futures.
March 12: The SEC's Investor Advisory Committee voted to recommend the agency advance a tokenized-securities policy allowing traders to bypass traditional settlement intermediaries — but with guardrails. The committee cautioned that "the most significant risk associated with the tokenization of equity securities is that these reforms...could introduce new risks that investors do not understand and impose higher costs that outweigh the benefits of tokenization."
Mid-March: SEC Chairman Paul Atkins indicated the Commission would soon consider an innovation exemption to facilitate limited trading of certain tokenized securities. The SEC and CFTC also signed a memorandum of understanding delineating jurisdiction — tokenized securities stay with the SEC, while digital assets functioning as commodities fall to the CFTC.
March 5: The FDIC, OCC, and Federal Reserve jointly clarified that banks will not face extra capital charges on tokenized securities, provided the tokenized instrument carries the same legal rights as the traditional security — a signal of technology-neutral, risk-focused regulation.
The Institutional Divide on Capital Markets Modernization
Not everyone on Wall Street is cheering. CoinDesk reported that while exchanges are racing toward tokenized equities and 24/7 trading, many institutional investors remain wary. Reid Noch, VP of U.S. equity market structure at TD Securities, said "institutional investors generally do not like instant settlement" because it creates new frictions for professional investors who rely on the current T+1 settlement window.
The proposed benefits — holding shares in digital wallets, trading outside traditional market hours — appear aimed primarily at retail and international investors rather than large institutions. That tension between retail access and institutional caution is likely to surface during questioning.
The Lobbying Landscape Around Blockchain Securities in Congress
Several companies at the center of the tokenization ecosystem have been actively lobbying in Washington over the past year.
Ondo Finance, a real-world asset tokenization platform focused on products like tokenized U.S. Treasuries, reported $30,000 in lobbying expenditures in the Fourth Quarter of 2025. Securitize, one of the leading platforms for tokenizing private securities, reported $50,000 in the First Quarter of 2025 before terminating its lobbying registration in the Second Quarter. Ava Labs, which develops the Avalanche blockchain used for institutional tokenization, registered as a new lobbying client in 2025. Citadel Enterprise Americas, a major capital markets player, filed lobbying reports in the Third and Fourth Quarters of 2025 covering securities structure and digital asset market infrastructure.
Of the four, only Citadel operates a registered PAC. The Citadel Securities PAC made contributions to committee Vice Chair Rep. Bill Huizenga (R-MI) among other members of Congress over the past two years.
The Digital Assets Hearing 2026 Details
The hearing — titled "Tokenization and the Future of Securities: Modernizing Our Capital Markets" — is scheduled for 2:00 p.m. in 2128 Rayburn House Office Building. It is a full-committee hearing chaired by Rep. French Hill (R-AR), with Rep. Maxine Waters (D-CA) serving as ranking member, Rep. Huizenga as vice chair, and Rep. Sean Casten (D-IL) as vice ranking member. The committee has not yet disclosed its witness list.
Carta's policy weekly described the emerging policy environment as "increasingly focused on enabling capital formation and driving innovation" with less jurisdictional friction and clearer rules — a framing that aligns with the hearing's stated focus on modernization rather than restriction.
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