How the SEC Went From Crypto Enforcement to Building an On-Chain Wall Street

Two years ago, Wall Street had to infer where blockchain fit inside securities law from enforcement actions. In 2026, the U.S. Securities and Exchange Commission (SEC) is writing the operating instructions.

On Tuesday (Sept. 1), the SEC proposed a sweeping modernization of the rules governing transfer agents, the firms that maintain securities ownership records, process transfers and connect issuers, investors and other market intermediaries. SEC Chairman Paul Atkins said in a statement that the proposal would update them to reflect current operations, explicitly including the use of “blockchain technology in connection with securities offerings and the transfer of shares.”

The agency’s transfer agent rules have not been substantively updated since the late 1970s and early 1980s. And while the word “blockchain” is attention-grabbing, the words that matter more for the office of the CFO are “official records.” After all, tokenization becomes considerably more interesting when distributed ledgers stop being merely representations sitting beside that machinery and begin becoming part of the machinery itself.

The SEC’s proposal comes on the heels of the London Stock Exchange Group (LSEG) Tuesday announcement of its own plans to launch ‌tokenized U.K. shares to expand global access to London-listed companies. The LSEG will partner with Payward, parent of crypto exchange Kraken, to explore new ways of trading equities.

Read more: SEC Rulemaking Is Giving Corporate Finance a New Crypto Hurdle Rate

The SEC is Moving Tokenization Closer to the Financial System’s Plumbing

Tokenization has spent years being sold through the benefits visible at the surface: 24/7 markets, fractional ownership, faster settlement, programmable assets and broader distribution. Transfer agents sit underneath those promises. They maintain records of ownership and changes in ownership and perform functions connecting issuers with investors and the national clearance and settlement system. The SEC itself calls them a “key component” of that system. Putting blockchain into the regulatory conversation around that infrastructure therefore moves tokenization beyond experimentation with the representation of assets.

The SEC had already laid some groundwork. In January, agency staff described tokenized securities as financial instruments whose ownership records can be maintained, at least partly, through crypto networks. But it also described structures in which blockchain records ultimately feed an off-chain master securityholder file.

Taken together, the SEC is beginning to address multiple layers required for institutional tokenization to become operational rather than theoretical: how assets are issued, how securities laws apply to them, who can custody them, where they can trade and now how ownership and transfers can be recorded.

The emerging framework is therefore less about creating a separate financial system called “crypto” than allowing pieces of conventional financial infrastructure to operate on blockchain technology.

See more: Three Charts Show Who Wants a Federal Bank Charter and Why

Financial Tokenization’s Next Phase Is About Architecture, Not Permission

None of this means the SEC has given Wall Street blanket permission to move American capital markets onto blockchain networks. The Sept. 1 rules are proposals, not final regulations. The Commission is soliciting comments for 60 days after publication in the Federal Register.

Findings in “Waiting for Certainty: Why Most CFOs Are Holding Back on Crypto and Stablecoins,” the March installment of PYMNTS Intelligence’s 2026 Certainty Project, showed that most middle market companies remain cautious about digital assets. Usage is limited, with 13% of firms using stablecoins and 5% employing other cryptocurrencies.

What is becoming clearer is that the institutional tokenization debate is moving from permission to architecture.

Who maintains the authoritative ownership record? Who controls access? Who has custody? What happens when settlement becomes instantaneous? How do tokenized securities interact with existing clearing infrastructure? How are errors reversed? Who bears responsibility when a smart contract, wallet provider, transfer agent and broker-dealer touch different parts of the same transaction?

Those are no longer questions about whether blockchain belongs on Wall Street. They are questions about how Wall Street works when blockchain is underneath it. That is a striking change from two years ago when the SEC’s most consequential crypto signals arrived through enforcement.

Two years ago in 2024, much of the institutional conversation revolved around where the SEC might draw the line. Now the more interesting question is what gets built inside it.

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