SEC Moves to Include Blockchain as Primary Securities Registry
The U.S. Securities and Exchange Commission (SEC) has introduced a landmark proposal to amend longstanding transfer agent rules, potentially allowing blockchain-based ledgers to serve as the official record for securities ownership. If adopted, this measure would officially recognize blockchain as the primary registry for tokenized securities, replacing traditional off-chain shareholder records and enhancing the reliability and consistency of ownership data.
Joris Delanoue, CEO of Fairmint, a SEC-registered blockchain transfer agent, noted that while securities registries have evolved from paper files to electronic systems over the past five decades, this would be the first time a blockchain database qualifies as the definitive ownership record rather than a mere copy.
Resolving the Dual-Record Challenge in Tokenized Securities
Currently, many tokenized securities maintain parallel records: blockchain-based token registers and traditional off-chain shareholder lists. This dual ledger approach creates complexity and operational burdens for issuers and transfer agents who must reconcile both datasets.
Eli Cohen, Chief Legal Officer at tokenization specialist Centrifuge, said the proposed change would simplify what is now a cumbersome two-step process into a single-step official recordkeeping system. This consolidation would reduce legal uncertainties and operational risks.
Cohen further emphasized that dual ledgers can lead to significant challenges, especially during insolvency or other extreme scenarios, as conflicting ownership claims are difficult to resolve. A single blockchain-based official record would streamline legal clarity and risk management.
Transfer Agents’ Role Remains Essential Despite Blockchain Adoption
The proposal retains strict compliance requirements for tokenized securities transfers, including identity verification and ownership restrictions. Consequently, transfer agents' responsibilities will not diminish. In fact, the official incorporation of on-chain data may raise expectations for higher standards in administrative oversight.
Tasks such as managing shareholder deaths, inheritance cases, legal notifications, postal address validation, and data corrections remain predominantly manual and require robust operational teams beyond smart contract capabilities. The SEC also plans to shorten processing times for these activities from the current 3–5 days to just one day to improve efficiency.
Delanoue highlighted that blockchain smart contracts alone cannot handle the full scope of transfer agent functions, necessitating comprehensive systems and personnel support to ensure compliance and smooth operations.
Cohen suggested that some tokenization platforms, faced with the administrative burden, might delegate parts of transfer agent duties to established traditional service providers with mature infrastructures.
Public Feedback Period Opens
The SEC has initiated a 60-day public comment period, set to close in early November. Stakeholders from traditional finance and blockchain sectors are expected to weigh in. Should the proposed rule take effect, it would significantly reshape the infrastructure of the U.S. tokenized securities market and support increased integration between emerging digital asset markets and the conventional financial system.