Should a tokenized stock be treated like crypto or stock? The Senate has some ideas.
The U.S. Senate has taken a step closer to resolving one of the thorniest issues in digital asset regulation. On September 5, 2025, lawmakers updated their crypto market structure bill with a new provision that explicitly classifies tokenized stocks as securities, not commodities.
The move seeks to close a regulatory gap that could have allowed tokenized versions of equities to slip under commodities oversight. By making it clear that tokenized stocks must remain within the Securities and Exchange Commission’s jurisdiction, senators aim to prevent potential conflicts across regulatory agencies while providing digital asset firms with clearer guardrails.
Senator Lummis pushes end-of-year target for crypto market structure bill
The change is part of the Responsible Financial Innovation Act of 2025, a sweeping framework designed to determine how digital assets are regulated in the United States.
Senator Cynthia Lummis of Wyoming, who leads the initiative, told CNBC that the Senate wants the bill “on the president’s desk before the end of the year,” reflecting the urgency around providing clarity to crypto markets.
Lummis explained that the legislation clarifies when digital assets should fall under the Securities and Exchange Commission (SEC) versus the Commodity Futures Trading Commission (CFTC).
She noted that the Banking Committee is expected to vote this month on securities provisions, followed by the Agriculture Committee in October for CFTC oversight. A full Senate vote could come as early as November.
Bipartisan negotiations remain ongoing. Lummis stated that “efforts to pair Democrats and Republicans on certain sub-issues” are being pursued to secure broader support.
The provision on tokenized assets is especially relevant for firms building blockchain-based products that rely on equities trading, since consistency with broker-dealer frameworks and clearinghouses will determine adoption.
What It Could Mean if Tokenized Stocks Are Regulated as Securities or Commodities:
If Regulated as Securities (SEC oversight):
- Falls under SEC jurisdiction
- Requires disclosures, investor protections, and broker-dealer compliance
- Compatible with existing clearing and settlement systems
- Supports integration with Wall Street infrastructure
If Regulated as Commodities (CFTC oversight):
- Falls under CFTC jurisdiction
- Traded like raw goods or derivatives with lighter disclosure rules
- May bypass securities laws but weakens investor protection
- Risks market fragmentation and regulatory arbitrage
Will the Securities tag for tokenized stock hurt crypto?
Notably, placing tokenized stocks under securities law could speed mainstream adoption, giving firms confidence to test blockchain settlement within defined legal parameters while ensuring compatibility with traditional equity infrastructure.
According to McKinsey & Company report, tokenized real-world asset capitalization could reach $2 trillion by 2030, with an optimistic case climbing to $4 trillion.
Still, regulatory scrutiny poses risks. Binance delisted tokenized stock offerings in 2021, including Apple and Tesla, after pressure from European regulators.
Yet advocates see lasting benefits. Treating tokenized stocks as securities could enable trading alongside traditional equities, blending investor protection with blockchain innovation and reshaping the convergence of Wall Street and decentralized finance.
