SEC member Hester Peirce, a Bitcoin bull, announced a positive new development for Cryptocurrency!

The SEC Member Hester Peirce announced that the Securities and Exchange Commission is exploring a potential exemption order that would allow companies to use distributed ledger technology (DLT) to issue, trade, and settle tokenized securities.

The announcement was made on the day before the last day of the SEC's 31st International Securities Market Growth and Development Institute.

Commission Member Peirce stated that it is important to modernize regulatory frameworks to accommodate innovation without compromising investor protection. The proposed exemption will allow companies to operate in a controlled environment similar to international "regulatory sandboxes" to test new trading systems and technologies.

Tokenization, which involves the structuring of traditional securities such as stocks and bonds as crypto assets on a blockchain, is a key focus area for the SEC's evolving crypto oversight. According to Peirce, limited trading venues and regulatory uncertainty have deterred the broader adoption of tokenized securities. A conditional exemption could break this cycle and provide regulatory relief to firms while ensuring market integrity and risk disclosures.

Such exemptions may still require firms to comply with standards that prevent fraud, maintain records, and undergo SEC oversight. Additional conditions may be applied to custody services and trading limits to mitigate risks. Peirce noted that successful implementation by firms could lead to increased flexibility over time.

Peirce, who called for both local innovation and international cooperation, encouraged global regulators to collaborate on cross-border sandbox initiatives. Highlighting the benefits of coordinated innovation to strengthen global capital markets, Peirce stated, "Regulatory balancing action is not a task that can be done in isolation."

The SEC has not yet formalized the exemption and is awaiting feedback from industry stakeholders while evaluating the next steps.