Source: Speech by Paul S. Atkins, Chairman of the U.S. Securities and Exchange Commission (SEC), at the America First Policy Institute; Compiled by Golden Finance. I'd like to discuss Project Crypto, which Commissioner Hester Peirce and I have co-sponsored. Project Crypto will serve as the SEC's goal to support President Trump's historic goal of making the United States the "Crypto Capital of the World." Before discussing our plans for crypto market dominance, let me take a moment to review some turning points in financial market history that bear parallels to the one we find ourselves in today, so that the future we shape will be worthy of the legacy we inherit. The Evolution of Capital Markets: From Buttonwood Trees to Blockchains The winds of innovation have always swept through our capital markets, often with unstoppable force. In 1792, the winds of innovation rustled the branches of a single buttonwood tree, and two dozen stockbrokers gathered beneath it to establish the forerunner of the New York Stock Exchange. This simple agreement—less than a hundred words, handwritten on a single sheet of parchment—launched a sophisticated structure that would govern the flow of capital for generations to come. (Note: The Buttonwood Agreement was an agreement reached by 24 American stockbrokers under a buttonwood tree on Wall Street on May 17, 1792, and is considered the origin of the New York Stock Exchange's rules.) For centuries, our markets have never stood still. They have expanded, evolved, and been reshaped by the ideas and technologies of the times. Markets are vibrant because of the people who participate in them. Markets direct human ingenuity to society's toughest problems by rewarding those who develop the most innovative, purchasable solutions. Markets are Adam Smith's invisible hand, a mechanism that elevates those who act in the public interest—even if they pursue their own self-interest. The SEC's job is to safeguard markets, allowing the spark of human creativity and skill to flourish for the benefit of society. Throughout its history, the SEC has both fostered innovation and, regrettably, stifled it. Fortunately, progress has its own laws. America's leadership will only be strengthened when our regulatory posture embraces innovation with consideration, not fear. In the 1960s—and, I'm proud to say, before I was born—Wall Street was enjoying a bull market. But behind the scenes, our market mechanisms were struggling to keep up. Clearing and settling most trades involved costly and cumbersome processes. Piles of paper stock certificates were wheeled back and forth on carts across Wall Street and other financial districts across the United States. It felt like a scene from another century, as people struggled to meet the demands of the modern securities market. In fact, the paper-based clearing and settlement system, originally built for more moderate times, began to buckle under the weight of soaring trading volume. Delays at one firm delayed work at another. Securities were lost or stolen. Failures surged. Many thinly capitalized broker-dealers were also stranded by trading disruptions. Trading hours were shortened, and the exchanges were ultimately closed on Wednesday to allow firms to process the mountain of certificates. The then-chairman of the SEC described the collapse caused by the outdated system as "the longest and most severe crisis in the securities industry in 40 years... firms failed and investor confidence plummeted." To its credit, the SEC proactively addressed the so-called "paperwork crisis." It helped market participants establish the Depository Trust & Clearing Corporation (DTC), which forever changed the way securities were held and traded. Now, stock ownership could be transferred through computerized book entries, eliminating the need to move paper certificates from client to broker, broker to broker, and broker to client. The certificates themselves were fixed and securely stored in vaults, while ownership was transferred electronically, laying the foundation for the modern clearing and settlement system that exists today.
Ticker tapes, like the one shown here, were a breakthrough in their day, revolutionizing how Americans accessed market information, line by line, tick by tick. But breakthroughs weren't just for the past.
By the late 1990s, the popularity of electronic trading systems (ATSs) had surged, upending old assumptions about how markets worked. SEC Chairman Arthur Levitt also believed the SEC should provide regulatory flexibility for innovation in electronic markets. Thus, Regulation Alternative Trading Systems (ATS), passed in 1999, allowed ATSs to be regulated like broker-dealers rather than exchanges. So, this brings me to today. Today is the moment for American ambition. Today is the moment for a project that can unleash that ambition. Our regulatory framework doesn't have to be stuck in the analog past—to the detriment of the new landscape. After all, the future is arriving at full speed—and the world won't wait. America must do more than just keep pace with the digital asset revolution. We must drive it.
Shaping the Future: American Leadership in a Golden Age of Finance
So today, I want the world to take notice that under my leadership, the SEC will not stand idly by while innovation flourishes overseas while our capital markets stagnate. To realize President Trump's vision of making the United States the cryptocurrency capital of the world, the SEC must fully consider the potential benefits and risks of moving our markets from an off-chain to an on-chain environment.
We are at the beginning of a new era in market history. As I mentioned earlier, today I am announcing the launch of Project Crypto, an SEC-wide initiative to update securities rules and regulations to enable the on-chainization of U.S. financial markets.
Just a few weeks ago, President Trump signed the GENIUS Act, ensuring that the United States will continue to lead in global payments with a stablecoin-based regulatory framework. As I sign the GENIUS Act, I'm pleased that President Trump supports Congress' efforts to pass cryptocurrency market structure legislation by the end of the year. I commend the House of Representatives for such strong bipartisan support and look forward to working with the Senate to build on the House's work and develop market structure legislation that will protect our markets from regulatory interference in the future and solidify America's position as the world's cryptocurrency capital. Yesterday, the President's Working Group on Digital Asset Markets released its PWG report, which explicitly recommends that the SEC and other federal agencies establish a framework to safeguard U.S. dominance in the cryptoasset market. This report is a blueprint for U.S. leadership in blockchain and crypto. Last week, the President stated that he wants "the entire world to run on the backbone of American technology." I stand ready to assist in this effort. That's why I've launched Project Crypto and directed SEC policy departments to work with the PWG, led by Commissioner Pierce, to rapidly develop proposals to implement the PWG's recommendations. Project Crypto will help ensure that the United States remains the world's best place to start businesses, develop cutting-edge technologies, and participate in capital markets. We will help crypto businesses that have fled the United States return, particularly those embattled by the previous administration's enforcement and regulatory actions and Operation Chokepoint 2.0. The SEC welcomes all market participants eager to innovate, whether incumbents or new entrants. In line with the recommendations of the PWG report, I have directed the SEC staff to draft clear and concise rules for the distribution, custody, and trading of crypto assets for public publication and comment. While the SEC staff works to finalize these rules, the SEC and its staff will consider using interpretive, exemption, and other powers in the coming months to ensure that outdated rules and regulations do not stifle American innovation and entrepreneurship. Many of the SEC's legacy rules and regulations are outdated in the 21st century, let alone for on-chain markets. The SEC must revamp its rulebook to ensure that regulatory moats don't hinder industry progress and competition—from both new entrants and incumbents—to the detriment of Main Street. Onshore Crypto: Project Crypto Initiatives Now, "Project Crypto" will involve a series of SEC initiatives. First, we will work to bring crypto asset distribution back to the United States. The era of convoluted offshore corporate structures, decentralized theater, and chaotic security postures is over. President Trump once said that America is in a golden age—and under our new agenda, so will our crypto economy. According to the PWG report, my top priority is to expedite the establishment of a regulatory framework for crypto-asset issuance in the United States. Capital formation is a core mission of the U.S. SEC, yet the SEC has long ignored the market's need for choice and suppressed cryptocurrency-based financing. As a result, the cryptocurrency market no longer offers crypto-assets, depriving investors of the opportunity to leverage this technology to contribute to productive economic enterprises. The SEC's ostrich mentality—and its shoot-first, ask-questions-later approach—is a thing of the past. Although the SEC has stated in the past that most crypto-assets are not securities, confusion surrounding the application of the "Howey Test" has led some innovators to preemptively treat all crypto-assets as securities. American entrepreneurs are leveraging blockchain technology to modernize various legacy systems and tools. One such entrepreneur is Ohio Senator Bernie Moreno, a successful businessman and newly elected senator. Before his election, he founded a company that transferred car titles to a blockchain. He saw the need for more efficient title transfers and designed a practical solution leveraging new technologies. These entrepreneurs need—and deserve—clear rules to determine whether the securities laws apply to their businesses. I have directed the SEC staff to develop clear guidance for market participants to use in determining whether crypto-assets are securities or subject to investment contracts. Our goal is to help market participants classify crypto-assets into categories such as digital collectibles, digital commodities, or stablecoins and assess the economic realities of transactions. This approach will allow market participants to use clear guidance to determine whether any unfulfilled promises or obligations by the issuer result in the crypto-asset being subject to an investment contract. Furthermore, it should not be considered a security. We need a regulatory framework for crypto-asset securities that allows these products to flourish in the U.S. market. Many issuers prefer the product design flexibility afforded by the securities laws, and investors will benefit from access to distributions, voting rights, and other typical features of securities. Projects shouldn't be forced into establishing decentralized autonomous organizations and offshore foundations, or prematurely decentralizing, if that's not their intended course of action. I'm excited to see new commercial use cases for crypto-asset securities, such as the ability to participate in blockchain network consensus using tokenized equity. Therefore, for crypto-asset transactions subject to securities laws, I've asked staff to propose fit-for-purpose disclosures, exemptions, and safe harbors, including for so-called "initial coin offerings," "airdrops," and network rewards. For these types of transactions, our goal should be for issuers to no longer exclude U.S. persons from their offerings to avoid legal complexity and litigation, but rather to include U.S. persons for the benefit of legal certainty and a lighter regulatory environment. I believe that if we maintain this approach, a Cambrian explosion of innovation is possible. Furthermore, many companies are seeking to "tokenize" their common stock, bonds, partnership interests, and other securities, or to tokenize third-party securities. Due to regulatory challenges in the United States, much of this innovation is currently taking place overseas. I've also heard from our regulatory policy staff that companies, from household names on Wall Street to unicorn tech companies in Silicon Valley, are lining up to tokenize. I have asked the SEC staff to work with companies seeking to issue tokenized securities in the United States and, where appropriate, to provide relief to ensure that Americans are not left behind. Second, to achieve the President's goals, the SEC has a responsibility to ensure that market participants have maximum choice when deciding where to custody and trade their crypto assets. As I have stated before, the right to self-custody private property is a core American value. I firmly believe that the right to use a self-custodial digital wallet to maintain personal crypto assets and participate in on-chain activities like staking is indispensable. However, some investors will still rely on SEC-registered institutions (such as broker-dealers and investment advisers) to hold assets on their behalf, and these firms will be subject to additional regulatory requirements when doing so. A top priority for my chairmanship will be implementing the PWG report's recommendations and updating the SEC's custody requirements for registered intermediaries. The previous administration's "special purpose broker-dealer" framework, SAB 121, and Operation Chokepoint 2.0 have resulted in a lack of choice among custodial providers in the market today. Existing custody rules were not designed with crypto assets in mind. I have directed staff to consider how best to adapt the existing regime to facilitate the custody of crypto assets, including potential exemptions or other remedies, in addition to changes to the rules themselves. As the PWG report recommends, market participants "should be allowed to engage in a variety of activities under the most efficient licensing structure possible." We should not force market participants to adapt to a Procrustean regulatory framework for the sake of regulation. I favor giving them the freedom to choose the most effective regulatory framework, provided that it adequately protects investors.
Promoting Super Apps: Horizontal Integration of Product Offerings
Third, a key priority of my chairmanship will be to allow market participants to innovate using “super apps.”
I’m often asked, “What do I mean by a super app?” The simple answer is: securities intermediaries should be able to offer a wide range of products and services under one roof with a single license. Broker-dealers with alternative trading systems should be able to offer trading in non-security crypto assets, as well as crypto-asset securities, traditional securities, and other services (such as crypto staking and lending) without having to apply for licenses in fifty states or multiple federal licenses. Nothing in the federal securities laws prohibits SEC-registered trading venues from listing non-security products on their platforms. I have directed SEC staff to develop further guidance and proposals to ultimately make this "super app" vision a reality. Perhaps they will call it "Reg Super-App." Consistent with the PWG report, the SEC should work with other regulators to establish the most efficient licensing structure for SEC-registered institutions. They should not be unnecessarily subject to multiple regulators or regulatory regimes. This model has worked well for banks, which are broadly exempt from many duplicative regulatory frameworks, such as broker-dealer and clearing organization registration. Regulators should provide the minimum level of effective regulation necessary to protect investors while allowing entrepreneurs and businesses to thrive. We should not impose overly paternalistic regulations that could force them to relocate overseas or weaken the international competitiveness of American businesses. Our regulators should unleash the power of competition across venues and products for the benefit of all Americans. We should not artificially constrain business models and impose duplicative regulatory costs on American businesses, costs that tend to favor the largest firms better able to bear the regulatory burden.
Consistent with the PWG's recommendations,I have directed SEC staff to develop a framework to allow non-security crypto assets and crypto-asset securities to trade side-by-side on SEC-regulated platforms. Additionally, I have directed staff to evaluate the use of SEC authorizations to allow non-security crypto assets subject to investment contracts to trade on trading venues not registered with the SEC. I am eager to pursue such a solution because it would not only allow state-licensed crypto platforms not registered with the SEC to list certain crypto assets, but would also pave the way for CFTC-regulated platforms to offer margin-enabled products—unlocking greater liquidity for these assets even without any additional authority granted to the CFTC by Congress. Unleashing America's Markets: Large, Beautiful On-Chain Software Systems Fourth, I have directed the SEC staff to update outdated agency rules and regulations to unlock the potential of on-chain software systems in our securities markets. On-chain software comes in many shapes and sizes—some are truly decentralized and operate without any intermediaries. Others have operators. Both types of on-chain software should have a place in our financial markets. Any regulatory market structure for crypto assets must create a path for software developers to develop on-chain software systems that operate without any central intermediaries. DeFi software systems, such as automated market makers, facilitate automated, disintermediated financial market activity. Federal securities laws have always assumed that the involvement of intermediaries warrants regulation, but this does not mean we should intervene to mandate the existence of intermediaries when markets can operate without them. We will create space in the market for both models by protecting pure software code publishers, distinguishing between intermediary and non-intermediary activities, and establishing reasonable and workable rules for intermediaries seeking to operate on-chain software systems. DeFi and other forms of on-chain software systems will become part of our securities markets without being overwhelmed by duplicative or unnecessary regulation. To make this vision a reality, we need to consider some regulatory changes. For example, we may need to explore amendments to the National Market Management System (Reg NMS) to accommodate the trading of tokenized securities on-chain, and we will also need to take the usual steps to correct market distortions. Many of you may remember that twenty years ago last month, I co-authored a lengthy dissent with SEC Commissioner Cynthia Glassman opposing the passage of Reg NMS. This dissent is even more compelling now, given that we've lived through two decades of prescriptive requirements that distorted market activity and hindered the development of securities markets. Congress's clear intent was that "competitive forces, not unnecessary regulation, should guide the development of the nation's market system." I will seek ways to return us to that intent, thereby fostering innovation and competition in our markets. Fostering Innovation: Commercial viability is our true North Star. Finally, innovation and entrepreneurship are the engines of the American economy. President Trump has described the United States as a "Nation of Builders." Under my leadership, the SEC will encourage America's builders, not constrain them with red tape and one-size-fits-all rules. The SEC is actively considering industry requests that could potentially jumpstart innovative activities, and it is also considering an innovation exemption that would allow both registrants and non-registered persons to quickly bring to market new business models and services that don't fully comply with our existing rules and regulations. The SEC will continue to ensure that market participants comply with certain conditions and requirements designed to achieve the policy objectives of the federal securities laws. Under my vision for an innovation exemption, innovators and visionaries would be able to immediately bring new technologies and business models to market without being subject to incompatible or burdensome prescriptive regulatory requirements that hinder productive economic activity. Instead, they would be able to comply with certain principles-based conditions designed to achieve the core policy objectives of the federal securities laws. These conditions could include, for example, a commitment to periodic reporting to the SEC, the inclusion of whitelisting or "verified pool" functionality, and restrictions on tokenized securities that do not conform to token standards (such as ERC3643) that include compliance features. I encourage market participants and SEC staff to consider all models with an eye toward commercial viability.
Conclusion
As we advance these priorities, I look forward to working with my colleagues in this Administration to make the United States the cryptocurrency capital of the world. This represents not only a regulatory shift, but a generational opportunity.
From the leaves of the sycamore tree to the ledgers on the blockchain, the winds of innovation continue to blow—and our task is to let those winds propel American leadership forward.
After all, ladies and gentlemen, we have never been content to follow. We will not stand idly by. We will lead, we will build. And we will ensure that the next chapter of financial innovation is written right here in America.
Miyuki
Brian
Weiliang
Joy
Alex
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