Speaker: Paul S. Atkins, Chairman of the U.S. Securities and Exchange Commission

Translated by: Alex Liu, Foresight News

U.S. Leadership in the Digital Financial Revolution

Good afternoon, everyone. Thank you, Norm, for the kind introduction, and thank you for inviting me. I'm very pleased to be with you, especially at what I believe is a crucial time for U.S. leadership in the cryptoasset market. Before sharing some reflections, I want to thank the America First Policy Institute for convening this timely discussion. Furthermore, for the peace of mind of compliance teams, I must state that the views expressed here today are solely my own and do not necessarily represent the views of the SEC or other Commissioners.

Today, I want to discuss what Commissioner Hester Peirce and I are calling "Project Crypto," which will serve as the SEC's North Star in assisting President Trump in his historic effort to make the United States the "Crypto Capital of the World." Before discussing our plans for crypto market dominance, I'd like to review some turning points in the history of capital markets, as they bear resemblance to where we find ourselves today. The future we shape should be worthy of the legacy we inherit.

From the Sycamore Tree to the Blockchain: The Evolution of Capital Markets

The winds of innovation constantly sweep through our capital markets, sometimes like a hurricane. In 1792, it stirred the branches of a sycamore tree—under whose shade, more than two dozen stockbrokers gathered and signed the agreement that would become the forerunner of the New York Stock Exchange. That agreement, written handwritten on parchment and consisting of fewer than a hundred words, launched an elegant system that has governed the flow of capital for generations.

For centuries, our markets have never stood still. They have expanded, evolved, and reshaped in response to contemporary ideas and technologies. Markets thrive because of human participation. They channel human ingenuity toward society's most challenging problems and, through incentives, reward those who develop the most valuable and sought-after solutions. This is the workings of Adam Smith's "invisible hand": even when people pursue their own self-interest, the market guides it toward the common good.

The SEC's role is to protect markets where human creativity and skill can benefit society. Throughout its history, the SEC has both fostered innovation and, regrettably, stifled it. Fortunately, the forces of progress will prevail. America's leadership always advances when our regulatory posture embraces innovation with caution, not fear.

In the 1960s—before I became involved—Wall Street was experiencing a bull market, but behind the scenes, market operations were frequently strained. Most clearing and settlement operations still relied on costly and cumbersome processes. Paper stock certificates piled up, requiring clerks to transport them on carts across Wall Street and other financial centers across the United States.

This paper-based clearing and settlement system, designed for a more moderate era, was clearly unable to cope with the exponential growth in trading volume. Processing delays at a single firm hindered the entire chain; securities were lost or stolen frequently; trade failures surged; and some less-capitalized brokerages faced bankruptcy due to trading disruptions. Consequently, trading hours were shortened, and exchanges even closed on Wednesdays to allow companies time to process the growing mountain of paper certificates.

The then-SEC Chairman described this systemic collapse as "the most severe and protracted crisis in the securities industry in 40 years... Firms went bankrupt and investor confidence plummeted." To their credit, the SEC responded proactively, encouraging market participants to establish what we know today as the Depository Trust & Clearing Corporation (DTCC), which revolutionized how securities are held and traded.

From then on, paper certificates no longer needed to pass between clients and brokers, and between brokers. Security ownership began to be recorded electronically. The certificates themselves were "frozen" and securely stored in a vault, while ownership was transferred via computer systems, laying the foundation for today's clearing and settlement systems.

Teletype machines, like the one next to me, were a breakthrough in the dissemination of market information, allowing Americans to receive line-by-line trade information in real time. But innovation shouldn't be a bygone era.

By the late 1990s, electronic trading systems were gaining popularity, shaking up many assumptions about traditional market structures. Arthur Levitt, then-SEC Chairman, similarly believed the SEC had a responsibility to provide regulatory flexibility for innovation in electronic markets. Thus, in 1999, Regulation ATS (Alternative Trading Systems) was introduced, allowing these systems to be regulated as broker-dealers rather than traditional exchanges.

This brings us to today—a moment that demands American ambition, and a project that can unleash that ambition.

Our regulatory framework should not be locked into the analog era, refusing to explore new frontiers. After all, the future is accelerating, and the world won't wait for us. The United States can't just catch up to the digital asset revolution; we must lead it.

Creating the Future: American Leadership in a Golden Age of Finance

Today, I want to declare to the world that under my leadership, the SEC will not stand idly by while innovation flourishes overseas while our own capital markets stagnate. To realize President Trump's vision of making the United States the global capital of crypto, the SEC must holistically consider the potential benefits and risks of migrating our markets from off-chain to on-chain. We stand at a new threshold in the history of capital markets. As I mentioned earlier, today I officially announced the launch of Project Crypto, an SEC-wide initiative to modernize securities regulations and enable the full migration of U.S. financial markets to on-chain. Just a few weeks ago, President Trump signed the GENIUS Act, establishing the gold standard for stablecoins in global payments. Following the signing, he publicly supported Congressional passage of crypto market structure legislation this year. I commend the House of Representatives for its bipartisan support in this process and look forward to the Senate building on this momentum to further improve the legislation, establish a structure for our markets to resist regulatory abuses, and strengthen America's leading position in the global crypto industry. Yesterday, the President's Working Group on Digital Asset Markets released its PWG Report, which provides clear recommendations to the SEC and other federal agencies for establishing a framework to maintain U.S. leadership in crypto asset markets. This report is a blueprint for ensuring America's leadership in blockchain and crypto. As the President said last week, he wants "the world to run on American technology infrastructure." I'm ready to help him achieve that goal. Therefore, I've launched the Crypto Initiative and directed the SEC's policy division to work closely with the Crypto Working Group, led by Commissioner Peirce, to rapidly develop a plan to implement the PWG Report's recommendations. The Crypto Initiative will ensure that the United States remains the best country in the world for starting businesses, developing cutting-edge technologies, and participating in the capital markets. We will bring back crypto businesses that fled the United States due to the previous administration's "enforcement instead of regulation" policy and Operation Chokepoint 2.0. The SEC welcomes market participants eager to innovate, from established players to new entrants. Bringing Crypto Assets Back to the United States: A New Era for the SEC The Crypto Initiative will encompass a range of initiatives within the SEC.

First, we will work to bring crypto-asset issuance back to the United States. Convoluted offshore corporate structures, pseudo-decentralization schemes, and confusion over whether crypto-assets are securities will be a thing of the past.President Trump has declared that the United States is in its "golden age"—and under our new agenda, the crypto-economy will enter one as well.

Based on the recommendations of the PWG report, one of my top priorities will be to quickly establish a regulatory framework for crypto-asset issuance in the United States. Capital formation is a core part of the SEC's mission, but for too long, the SEC has ignored the market's need for choice and discouraged crypto-based fundraising models. This has led the crypto market away from asset issuance, depriving American investors of the opportunity to participate productively in the economy through this technology.The SEC's long-standing avoidance of crypto-assets, a "shoot first, ask questions later" approach, should be a thing of the past.

Although the SEC has historically considered most crypto-assets securities, in reality, the majority are not. However, due to the vague scope of the Howey Test, some innovators are playing it safe by treating all crypto assets as securities. American entrepreneurs are leveraging blockchain technology to modernize various traditional systems and tools. For example, Bernie Moreno, current U.S. Senator from Ohio and a former entrepreneur, founded a company before his campaign to put car titles on the blockchain. He recognized the inefficiency issues in transferring property rights and proposed a practical solution using blockchain technology.

These entrepreneurs need and deserve clear criteria to help them determine whether their businesses fall under securities laws. I have directed Commission staff to develop clear guidance to help market participants determine whether a crypto asset is a security or an investment contract. Our goal is to help them classify crypto assets into categories such as digital collectibles, digital commodities, or stablecoins based on these clear criteria and assess the economic substance of their transactions. These classifications will allow market participants to determine whether the issuer has an ongoing commitment or obligation, and therefore whether the asset constitutes an investment contract.

Furthermore, being designated as a security should not be a sin against development. We need a regulatory framework that accommodates crypto-securities and allows them to flourish in the US market. Many issuers will be drawn to the product design flexibility afforded by securities laws, and investors will benefit from security attributes like dividends and voting rights. Projects shouldn't be forced to launch DAOs, create offshore foundations, or decentralize prematurely at a less-than-ideal stage. I'm excited about new commercial applications for crypto-securities, such as participating in blockchain consensus mechanisms through tokenized shares.

Therefore, for those crypto-asset transactions that do fall under securities laws, I have asked staff to propose specific disclosure requirements, exemptions, and safe harbors, including for so-called initial coin offerings (ICOs), airdrops, and network reward programs. Our goal is to ensure that issuers no longer exclude US users due to legal risks, but rather choose to include US users in their offerings to benefit from legal certainty and a friendly regulatory environment. I believe that as long as we stay on this path, we have the potential for a Cambrian explosion of innovation.

Furthermore, many companies are looking to tokenize securities such as common stock, bonds, and partnership interests, or to tokenize securities issued by others. Due to regulatory barriers in the United States, much of this innovation is occurring overseas. At the same time, our policy department has received numerous applications—from Wall Street stalwarts to Silicon Valley unicorns—seeking approval to distribute security tokens within the United States. I have asked the Commission to work with these companies to provide regulatory exemptions, where appropriate, to ensure that the United States is not left behind in crypto innovation.

Enhancing Freedom: Providing Diverse Custody and Trading Options

Second, to achieve the President's goals, the SEC must ensure that market participants have maximum freedom in choosing custodian and trading platforms. As I have stated, the right to own and independently manage private property is a core American value. I firmly believe that individuals have the right to hold their crypto assets in self-custodial wallets and participate in on-chain activities, such as staking. However, some investors still choose to entrust their assets to SEC-registered intermediaries, such as broker-dealers or investment advisors, which are subject to additional regulatory requirements when providing custodial services.

Implementing the PWG report's recommendations on modernizing the SEC's custodial obligations for registered intermediaries will be a priority during my term. The previous administration's implementation of the Special Purpose Securities Firm framework, SAB 121 filings, and Operation Cutoff 2.0 has resulted in a paucity of compliant crypto-asset custody providers. Existing custody regulations do not account for the unique characteristics of crypto-assets. I have directed staff to explore how to adapt the current system, including providing exemptions or rule changes where necessary, to facilitate the development of crypto-asset custody services.

The PWG report also recommends that market participants be allowed to conduct multiple lines of business under the most effective licensing structure. We cannot force them into an outdated "Procrustean bed" regulatory system. I support allowing them the freedom to choose the regulatory path that best suits their business, while protecting the interests of investors.

Promoting Super Apps: Achieving Horizontal Integration of Products and Services

Third, another key goal of my chairmanship is to allow market participants to innovate within the framework of "Super Apps." Many people ask me, "What is a Super App?" It's simple: securities intermediaries should be able to offer a variety of products and services under a single platform and license. A broker-dealer with an alternative trading system (ATS) should be able to offer trading in non-security crypto assets, trading in security-related crypto assets, traditional securities services, as well as staking, lending, and other services, without having to apply for licenses in more than fifty states or multiple federal licenses.

Currently, federal securities laws do not prohibit registered trading platforms from listing non-security assets. I have directed Commission staff to develop further guidance and plans to promote the implementation of these "Super Apps." Perhaps we will eventually call them "Reg Super Apps."

As recommended in the PWG Report, the SEC should collaborate with other regulators to establish the most streamlined and efficient licensing system for registered intermediaries, avoiding the need for them to be subject to multiple regulatory oversights. This model is already widely adopted in the banking industry. For example, banks generally do not need to register as securities dealers or clearing houses. Regulators should provide the minimum necessary regulation to protect investors while encouraging business growth. We should not use excessive, paternalistic regulation that forces businesses to move overseas, nor should we skew the regulatory burden to favor large, well-resourced corporations, thereby stifling the competitiveness of small and medium-sized enterprises. In line with the specific recommendations of the PWG report, I have directed the Commission to develop a framework to enable the parallel trading of non-security crypto assets and securities crypto assets on the same SEC-regulated platforms. Furthermore, I have requested a review of how to use the Commission's authority to allow certain crypto assets to be listed on non-SEC-registered trading platforms. This would not only allow state-licensed platforms to offer more assets but also provide margin functionality to CFTC-regulated platforms, despite Congress not granting them additional authority, which would unlock greater liquidity. Unleashing the Potential of the U.S. Market: The Power of Beautiful and Powerful On-Chain Software Systems Fourth, I have directed Commission staff to update outdated regulations to unlock the potential of on-chain software systems in the U.S. securities market. On-chain software comes in many forms—some are truly decentralized and operate without intermediaries; others are maintained by specialized operators. All forms deserve a place in our financial markets. Any regulatory framework for cryptoasset market structure must provide a clear path for developers of on-chain software that doesn't rely on centralized intermediaries. Decentralized finance (DeFi) software systems—such as automated market makers (AMMs)—enable automated, disintermediated financial market activities. U.S. federal securities laws have consistently assumed the presence of regulated intermediaries, but this doesn't mean we should impose them simply to accommodate legacy regulatory logic. If markets can operate without intermediaries, we should respect that. We will allow space for both models—centralized and decentralized—to thrive in the U.S. market. We will protect developers who simply release software code, draw a clear line between intermediary participation and disintermediation, and establish clear and enforceable regulations for intermediaries who wish to operate on-chain software systems. DeFi and other on-chain software systems will become part of our securities markets, rather than being stifled by redundant or excessive regulation. To achieve this vision, we will need to revise existing rules. For example, supporting on-chain trading of securities may require revising Regulation NMS. In fact, twenty years ago, I co-authored a dissent with then-Commissioner Cynthia Glassman against Reg NMS, and those concerns seem even more relevant today. Over the past two decades, the excessive requirements imposed by Reg NMS have distorted market activity and hindered the natural evolution of U.S. securities markets. Congress envisioned a national market system where competition, not unnecessary regulation, would guide its development. I will work to return us to that original vision and further foster innovation and competition in our markets. Fostering Innovation: Commercial Viability is Our North Star Finally, innovation and entrepreneurship are the engines of the American economy. President Trump once called the United States a "nation of builders." Under my leadership, the SEC will encourage this spirit, rather than stifle it with red tape and one-size-fits-all regulations. The Commission is actively considering several reform proposals from the industry to spur innovation, and we are exploring the introduction of an "innovation exemption"—one that would allow both registered and unregistered institutions to quickly bring new business models and services to market, even if these models don't fully align with existing rules. My vision for this innovation exemption would allow technology pioneers and business visionaries to participate immediately without complying with burdensome regulations that are outdated or hinder economic activity. In return, they would be subject to principles-based conditions that achieve the core policy objectives of the federal securities laws. These conditions could include commitments to periodic reporting to the SEC, the introduction of whitelisting or "certification pools," and the restriction that only security tokens that meet compliance functionality standards (such as ERC3643) be allowed to circulate. I encourage market participants and SEC staff to prioritize commercial viability as they develop their models.

Conclusion

As we advance these priorities, I look forward to collaborating with other parts of the government to make the United States the global capital of crypto. This is not just a regulatory transformation, but a generational opportunity.

From paper agreements under the sycamore trees to electronic ledgers on the blockchain, the winds of innovation continue to blow. Our mission is to keep them blowing, propelling American leadership forward. After all, ladies and gentlemen, we are never content to follow others. We will not sit on the sidelines. We will lead. We will build. And we will ensure that the next chapter of financial innovation is written in America.

Thank you so much for your attention today. Stay tuned for our upcoming announcements and proposals, and as always, we welcome your valuable suggestions and input.