SEC Officials Call for Crypto Regulatory Clarity, Address Tokenization, Stablecoin Classification, and Custody Reform

SEC Commissioners Hester Peirce and Mark Uyeda have underscored the urgent need for regulatory clarity in the US cryptocurrency market, focusing on issues of custody, asset classification, and evolving market structures. Peirce compared the lack of clear guidance to a game of ’the floor is lava’, reflecting uncertainty around the treatment of crypto assets and staking. Uyeda advocated for broadening the definition of qualified custodians to include state-chartered trust companies, arguing this would foster growth and innovation, and called for tailored, participatory regulations that recognize the diversity of digital assets over a one-size-fits-all approach. In later developments, Mark Uyeda expanded on the SEC’s evolving approach to tokenization in traditional finance, suggesting that tokenizing equities could be the next major step after digital ledgers. He clarified that nonprofit stablecoins not generating interest or dividends are not classified as securities, but stressed robust risk controls for products like tokenized money market funds. Uyeda pointed out that while retail access to tokenized stocks may take time, it could be expedited by regulatory exemptions or new guidance. Addressing sector-specific products, Uyeda said the SEC would assess any crypto ETF—regardless of political connection—based on transparency and legality. Both Uyeda and Peirce criticized regulation by enforcement and sanctions, advocating for more transparent, predictable, and collaborative rules. This series of statements signals a potential shift towards greater regulatory engagement with the crypto industry, increased openness to innovative financial products, and clearer guidance on stablecoins and digital asset classification. For crypto traders, these moves could pave the way for wider institutional adoption and a more stable trading environment, though regulatory uncertainty still presents short-term challenges.