US Tokenization Debate Grows as SEC Reviews Ondo Finance Recommendations

Ondo Finance urges U.S. regulators to accelerate tokenized securities growth by clarifying rules that could unlock innovation, strengthen investor control, and help the country catch up to faster-moving global markets.

Ondo Finance Outlines Tokenization Blueprint for SEC

Ondo Finance Inc. submitted on Dec. 4 written input to the U.S. Securities and Exchange Commission (SEC) Crypto Task Force proposing a roadmap designed to accelerate the development of tokenized securities in the United States. The firm stated that unresolved regulatory questions have slowed domestic progress relative to other markets.

“The purpose of this submission to the Commission is to describe what we believe are the root causes limiting tokenization adoption, to describe practical steps the Commission and its staff may take to develop greater consensus on appropriate actions to take, and to offer our expertise as support for those actions,” Ondo Finance explained.

Ondo’s roadmap recommended that the SEC support all three emerging tokenization models—direct registration, tokenized beneficial ownership tied to securities held in DTC, and newly created digital securities backed by DTC-held assets. The firm urged the SEC to prioritize tokenization of securities entitlements held in DTC, pursue targeted no-action and exemptive relief to allow compliant products to launch, and recognize permissionless blockchains as appropriate settlement layers. Ondo further encouraged market-led product development, a long-term review of DTC’s structural role, and reforms that strengthen investor control.

The submission states:

Tokenization efforts now underway are better for investors in numerous respects with fairly modest reforms, so, when paired with the SEC’s traditional focus on investor protection, the topic should be a natural candidate for SEC leadership.

Ondo argued that these steps would help the United States regain momentum as other jurisdictions adopt clearer rules supporting tokenization. While some stakeholders caution that tokenization may complicate existing systems or introduce operational challenges, pro-crypto perspectives counter that on-chain structures enhance transparency, improve settlement efficiency, and expand investor autonomy. Supporters add that permissionless blockchain architectures could ultimately increase capital efficiency and give market participants more direct ownership rights across financial markets.