The U.S. Securities and Exchange Commission has proposed a change that could alter how tokenized securities are recorded in law as well as in technology. Under the plan, electronic databases, including blockchain ledgers, could be recognized as the official record of securities ownership.
For tokenized stocks and similar assets, that would address a long-running mismatch between what appears onchain and what counts as the legal shareholder register. If adopted, the proposal could reduce duplicate recordkeeping, lower reconciliation work and ease legal uncertainty, though it would not remove the compliance duties tied to regulated securities.
A fix for the two-record problem
Many tokenized securities currently operate with two separate ownership records at once: the blockchain ledger that shows who holds the token, and a separate official shareholder register maintained offchain. In practice, lawyers now treat the non-blockchain register as the controlling legal record, even when the digital ledger may be more current.
The SEC proposal, released last week as part of a broader overhaul of transfer-agent rules that date back decades, would explicitly permit electronic databases to function as the official securities ownership file. That means a blockchain could become the master securityholder record instead of merely mirroring information stored elsewhere.
Industry participants cited in the report said that change could turn tokenization from an overlay on existing market infrastructure into a component of the legally recognized system itself.
Why firms say the change matters
If blockchain is allowed to serve as the authoritative register, issuers and transfer agents may no longer need to maintain parallel records and reconcile them after each transfer. That could reduce operational friction and the risk of discrepancies between the token ledger and the legally recognized ownership file.
Eli Cohen, chief legal officer at fund tokenization specialist Centrifuge, said the current arrangement is not only inefficient but potentially problematic in extreme cases. He said an insolvency or bankruptcy under a two-ledger setup could create a significant legal mess.
Joris Delanoue, CEO of SEC-registered onchain transfer agent Fairmint, described the proposal as recognition that a blockchain can function as the database of record, rather than just a copy of another database.
What the proposal would not change
The SEC plan does not mean tokenized securities would become fully permissionless. Even if a public blockchain is used as the ownership record, the securities themselves would still need to follow existing rules on who can own them and how transfers are handled.
According to the report, that means identity checks, transfer restrictions and similar regulatory controls would still need to be enforced, potentially through features built into the token or through the processes overseen by transfer agents. The ledger may change, but the compliance framework around the asset would remain in place.
Higher demands on transfer agents
The proposal could also increase expectations for firms acting as digital transfer agents. They would still be responsible for administrative tasks that go well beyond maintaining a ledger, including handling shareholder deaths, inheritance matters, legal notices, mailing addresses, ownership restrictions and correcting records when issues arise.
Some of those duties still involve physical processes. Delanoue noted that firms must receive, open, identify and act on mailed documents under prescribed procedures. He added that the current processing window is three to five days, while the SEC proposal could shorten that to one day.
That burden may shape business decisions across the tokenization sector. Firms that recently acquired transfer agents or obtained licenses may need more staff, systems and controls than a smart-contract-based model alone would suggest. Cohen said some companies may conclude that running a full transfer-agent operation is heavier than expected and choose to rely on established providers for parts of the work.
Public comments are due in early November
The proposal now enters a 60-day public comment period that runs until early November. The next confirmed step is feedback from market participants, including both traditional financial firms and blockchain-native companies.
What happens after that will depend on the SEC's rulemaking process, but for now the proposal has opened a path for blockchain ledgers to be treated as official securities ownership records rather than secondary copies.
Source: www.coindesk.com