Tokenized Securities Hearing Warns of US Tokenization Exodus

U.S. House Financial Services Committee held a hearing on the regulation of tokenized securities. Salman Banaei, head of legal at regulated RWA blockchain project Plume, testified that tokenization market infrastructure is starting to move offshore due to U.S. regulatory uncertainty. Plume was the only Web3 project on the panel. Other witnesses included DTCC, Nasdaq, and SIFMA, which focused on settlement, custody, trading-venue integration, and investor protection. Banaei argued that without clearer rules, developers will face higher legal costs and may relocate to jurisdictions with more predictable frameworks. The testimony highlighted a global competitive shift. The EU’s MiCA regime (fully effective in 2026), plus clearer approaches in Switzerland, Singapore, and the UAE, were cited as magnets for blockchain firms. Plume urged Congress to (1) define regulator jurisdiction between the SEC and CFTC, (2) create an innovation “regulatory sandbox,” (3) tailor frameworks by asset type (securities vs commodities), and (4) pursue international regulatory harmony. Market relevance: tokenization is key to real-world asset adoption, but shifting infrastructure offshore could affect which platforms gain liquidity and standard-setting influence. The legislative process and any upcoming proposals for digital asset market structure could shape sentiment and positioning across the broader tokenization and RWA ecosystem.