Associations in the exchange industry and global regulators have joined forces to hinder the growth and adoption of tokenized stocks, focusing that these products do not represent actual equality and expose investors to significant risks.
According to Reuters.
Organizations argue that tokenized stocks will “imitate” the equality designed to represent but lack of investor protections developed in the traditional market.
“We have been alarmed at Plethora of brokers and platforms that provide crypto offering or planning to offer so-called tokenized US stocks,” WFE told Reuters, without nameing specific companies or platforms. “These products are sold as stock tokens or equivalent to stocks when they are not.”
Push carries a weight given by the influence of signators. EMSA is an European Union agency and one of the three major administration authorities in the financial bloc.
Iosco is a international body That sets standards for the security regulation and protection of the investor throughout the global market.
WFE, headquarter in the UK, is an industry group that represents the exchanges and cleaning of houses around the world.
Call for clampdowns came as Tokenized securities get traction On Wall Street and beyond, driven by the promise of greater efficiency, lower cost and more accessible market access through blockchain technology.
The cost of tokenized assets has risen to the past $ 26 billion, according to industry data.
Tokenized stock – digital representations of traditional equities released in a blockchain – remain a small cut market, but their footprints are expected to grow as basic platforms such as Coinbase, Kraken and Robinhood Move into space.
Related: The Crypto Future in Asia-Middle East Corridor lies with permission scale
Lobby groups shout out efforts to hinder crypto taking
This is not the first time that traditional industry lobbies have joined forces to slow down the growth of blockchain change. While US lawmakers have fallen into the genius Stablecoin Bill, Banking groups silently lobbying To exclude stablecoins that bring yield-a feature that can directly compete with their service offerings.
Eventually they were successful, with genius that clearly prohibited those who gave Stablecoin from paying interest to holders.
While the passage of genius is widely seen as a win for the Stablecoin industry, it also comes on a trade-off. “With a clear ban on those who provided stablecoin from the yield offering, the Genius Act really protects a major advantage of money market funds,” Temujin Louie, CEO of Crosschain Interoperability Protocol Wanchain, said to the cointelegraph.
However, the SEC appears to be open to tokenization at the highest level. In July, SEC Chair Paul Atkins Described tokenization as a “change” that should be advanced within the US economy.
In the same month, the SEC Commissioner Hester Peirce emphasized that tokenized security, including tokenized equities, should comply with existing security laws.
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Related: VC Roundup: The Bitcoin Defi Surge, but tokenization and stablecoins take vapor
