The SEC delayed tokenizing stocks, and here’s why that’s a relief
The author argues that the SEC's delay in tokenizing stocks is beneficial because current compliance systems are not equipped for real-time execution. The piece calls for a shift toward 'cognitive compliance' to prevent fraud in digital asset markets.
Why it matters
As financial markets move toward blockchain-based settlement, the gap between legacy regulation and real-time technology poses a significant risk to retail investors.
The problem isn’t tokenization itself. It’s that we’re about to tokenize the world’s most liquid markets with legacy compliance systems that aren’t built for real-time execution. Currently, there is always a lag of one to two days between when a trade is executed and when it is fully settled. As we move towards real-time execution, we need compliance systems that evaluate trades in real time, especially if they are intended to support the transfer of tokenized U.S. equities.
The article advocates for a specific regulatory approach and critiques current institutional systems from a market-participant perspective.
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