Citadel Warns SEC: Tokenization Should Drive Real Innovation, Not Regulatory Workarounds
As U.S. regulators consider simplifying rules for securities tokenization, Citadel Securities is pushing for a focus on genuine technological progress rather than exploiting regulatory gaps.
The financial giant emphasized that tokenization must deliver tangible improvements to market efficiency, transparency, and accessibility. While the Securities and Exchange Commission explores ways to modernize securities laws for blockchain-based assets, Citadel cautioned against using tokenization merely as a means to bypass existing regulations.
Tokenization—the process of converting traditional assets into digital tokens on a blockchain—has gained traction as a way to enhance liquidity, reduce settlement times, and lower costs. However, Citadel argues that the industry must prioritize real-world utility over shortcuts that could undermine investor protection or market stability.
The firm’s stance comes amid growing debate over how regulators should approach tokenized securities. Some industry players advocate for lighter oversight to encourage innovation, while others, like Citadel, stress the need for clear guidelines that prevent misuse.
Citadel’s comments highlight a broader concern in the financial sector: ensuring that blockchain adoption aligns with core market principles rather than creating fragmented or risky workarounds. The company urged the SEC to strike a balance between fostering innovation and maintaining robust regulatory standards.
As discussions continue, the focus remains on whether tokenization can evolve beyond theoretical benefits and deliver measurable advantages for investors and markets. The outcome could shape the future of digital assets in traditional finance.
