Yesterday a House Financial Services Subcommittee hearing on tokenization laid bare confusion and political differences relating to public blockchains and tokenized securities. More than one Democrat complained that the FIT 21 crypto Bill recently passed by the House would allow securities issuance without the usual safeguards. Those statements needed caveats, making some of them inaccurate. The other bone of contention and confusion was around public blockchains and compliance.
All the witnesses were in agreement on the benefits of tokenization. They said it will create efficiencies in the issuance, servicing and settlement of tokenized securities transactions. Potentially, fractionalization could enable distribution to a broader set of investors.
The main differences related to public blockchains. Two witnesses suggested public blockchains should be avoided for tokenized traditional securities. Congressman Casten, one of the more thoughtful representatives, has major issues with public blockchains that stem from anonymity.
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