The SEC is moving to let regulated transfer agents use public blockchains as official shareholder ledgers, opening the door for tokenized securities while keeping traditional identity checks and regulatory controls in place
The U.S. Securities and Exchange Commission is preparing to let Wall Street's official shareholder records move onto public blockchains-if, and only if, regulated transfer agents remain in charge. This marks the first time the SEC has proposed rewriting its transfer-agent rules in nearly half a century, and the stakes are high: the agency is signaling that tokenized securities could soon be recognized as legal share ownership, not just digital representations running in parallel.
Modernization Without Full Decentralization
The SEC's proposal, published September 1, would allow distributed ledger technology-including public blockchains-to serve as a company's master securityholder file. But the agency is not handing over the keys to the blockchain crowd. Instead, a single registered transfer agent would still control the official record, responsible for its accuracy, security, and regulatory compliance. The SEC is clear: blockchain can be the infrastructure, but the gatekeeper remains a regulated intermediary.
Under the draft rules, transfer agents could choose whether to use conventional databases or distributed ledgers. The system must remain secure, up-to-date, and accessible to regulators regardless of the underlying technology. The SEC is also proposing new reporting requirements for tokenized securities, including changes to Form TA-2 that would force agents to disclose their use of distributed ledgers and the platforms involved. Technology providers, however, would not inherit regulatory responsibility simply because their infrastructure is used.
Identity Rules and Onchain Data
While the proposal would let wallet addresses, balances, and transaction data live onchain, it stops short of making share ownership fully wallet-native. The master securityholder file would still require each holder's full name and physical mailing address, even if a digital wallet address is included. The SEC is soliciting public comment on whether these traditional identity requirements should be relaxed, but for now, the agency is drawing a hard line between modernizing recordkeeping and overhauling the identity system that underpins U.S. securities law.
Commissioner Hester Peirce has floated the idea of using email or wallet addresses in place of names and physical addresses in some cases, but the current proposal keeps the old requirements intact. Sensitive personal information would remain offchain, stored in separate systems, while transaction data could be fully transparent on a public blockchain. This hybrid approach aims to balance transparency, privacy, and regulatory oversight.
Industry Reaction and Regulatory Context
Securitize, a registered transfer agent managing over $4 billion in tokenized real-world assets, has publicly supported the SEC's direction. The company has long argued for integrating public blockchains into official securities recordkeeping, provided that transfer agents retain oversight. Securitize called the proposal a step toward higher standards and a tailwind for digital securities adoption, but the company's business model depends on the continued role of regulated intermediaries.
The SEC's move comes as staff guidance had already permitted registered transfer agents to use distributed ledgers as the official shareholder file, provided regulatory requirements were met. The new proposal would formalize this approach, eliminating the need for offchain duplicates and clarifying the regulatory framework for tokenized securities. The agency is accepting public comments for 60 days after publication in the Federal Register, but as of September 1, no publication date had been set.
For context, the SEC's willingness to update legacy rules stands in contrast to the gridlock facing broader crypto legislation. As reported earlier, the CLARITY Act's prospects have dimmed as key policymakers exit, leaving digital asset regulation in flux.
Practical Impact and Market Data
If adopted, the SEC's proposal could accelerate the use of tokenized securities in U.S. capital markets, but only within a tightly controlled regulatory perimeter. Transfer agents would gain flexibility to adopt blockchain infrastructure, but investors and issuers would still face the same identity checks and regulatory scrutiny as before. According to Securitize, the company's $4 billion in tokenized assets under management reflects growing institutional interest, but the market for tokenized securities remains a fraction of the multi-trillion-dollar U.S. equities market. The SEC's proposed changes would not require any company to use blockchain, but would make it a viable option for those seeking to modernize their recordkeeping systems.
For the 2025 reporting period, the SEC's Form TA-2 would require transfer agents to disclose whether they use distributed ledger technology, the types of securities involved, and the platforms or tokenization agents supporting those arrangements. This data could provide the first comprehensive look at how much of the U.S. securities market is moving onchain, and which technologies are gaining traction among regulated intermediaries.
The SEC's proposal to let public blockchains serve as official shareholder ledgers-while keeping transfer agents in control-signals a pragmatic shift rather than a leap into full decentralization. The agency is betting that blockchain can improve transparency and efficiency, but only if the traditional gatekeepers remain firmly in place. For tokenization advocates, this is progress, but it's not the revolution some have promised. The SEC's approach is cautious, incremental, and designed to preserve regulatory leverage even as the underlying technology evolves. Anyone expecting the agency to hand over the keys to a wallet-native future will have to keep waiting.
Tokenized securities represent digital claims to real-world assets-such as stocks, bonds, or funds-recorded on a blockchain. While blockchain infrastructure can provide transparency and efficiency, legal ownership in the U.S. still depends on compliance with securities law, including identity verification and regulated intermediaries. The SEC's proposal highlights the distinction between technological innovation and legal recognition: a blockchain record may be immutable, but it is not legally binding unless the regulatory framework accepts it as authoritative. For investors and issuers, the practical impact of tokenization will depend less on the technology itself and more on how regulators choose to adapt legacy rules to new infrastructure.
