The U.S. SEC had intended to disclose part of the encryption control arrangements together this Friday, but the related public meeting was temporarily cancelled. According to a number of sources, the “innovation exemption”, which was intended to facilitate the exchange of monetized securities, will again be postponed.
This exemption was intended to lower the compliance threshold by allowing institutions to issue and trade securities in chains within the framework of existing securities laws. The White House, for its part, is concerned that the separate advance of the SEC at this time may interfere with Congress's progress in negotiating the Digital Asset Market Clarity Bill.
Wall Street is against an exemption from the rule.
Resistance from traditional financial institutions is also on the rise. The Wall Street Industry Organization, SIFMA, was mentioned as one of the main forces against this arrangement. The core view was that major adjustments involving the structure of the securities market should not be advanced through exemptions but should go into the formal rule-making process.
The controversy focused on how the place of trade in the chain fit the existing United States share rules, in particular the obligation of the issuer to seek the best price for the customer. The current United States market relies on regulation NMS to communicate prices between exchanges, but price formation and implementation costs may differ from traditional exchanges if tokenized securities are traded on a decentrized platform or on an automated market.
Re-evaluate the legal basis within SEC
In addition to external resistance, the Commission is re-examining its own competencies. According to the source, there is growing concern among staff as to whether the agency has sufficient legal basis to provide such a wide range of exemptions and whether the necessary economic analysis and procedural steps have been completed.
It was also reported that the industry had been informed that the work might need to await the outcome of the Digital Asset Market Clarity Act. The SEC spokesperson did not respond immediately to questions about the timing.
The monetization pushes faster than the regulatory landing.
This is not the first time that the proposal has been deferred. In May this year, the SEC was also close to issuing the programme, but eventually it did not land. At that time, the market was concerned that the exemption might allow for the issuance of currencies for “synthetic” securities that did not correspond to lower-level securities.
This delay was of particular interest as Wall Street accelerated the testing of the security infrastructure along the chain. NASDAQ and NYC have all disclosed their plans, and the United States Deposits and Settlements Corporation has completed a real production environment test transaction of monetized securities last month. Citicorp had previously predicted that by 2030 the monetized asset market could reach $5.5 trillion.