#CryptoRoundTableRemarks Keynote Address at the Crypto Task Force Roundtable on Tokenization.
Thank you and good afternoon. I am delighted to speak to this distinguished group at today’s roundtable on tokenization.[1] Thank you to the panelists for participating today.
The topic of this afternoon’s discussion is timely as securities are increasingly migrating from traditional (or “off-chain”) databases to blockchain-based (or “on-chain”) ledger systems.
This movement of securities from off-chain to on-chain systems is akin to the transition of audio recordings from analog vinyl records to cassette tapes to digital software decades ago. The ability to easily encode audio in a digital file format, which could readily be transferred, modified, and stored, unlocked tremendous innovation within the music industry.[2] Audio was freed from its boundaries as a static, fixed-format creation. It suddenly was compatible and interoperable across a wide range of devices and applications. It could be combined, broken apart, and programmed to form entirely new products. This also led to the development of novel hardware devices and streaming content business models, greatly benefiting consumers and the American economy.[3]
Just as the shift to digital audio revolutionized the music industry, the migration to on-chain securities has the potential to remodel aspects of the securities market by enabling entirely new methods of issuing, trading, owning, and using securities. For example, on-chain securities can utilize smart contracts to transparently distribute dividends to shareholders on a regular cadence. Tokenization can also enhance capital formation by transforming relatively illiquid assets into liquid investment opportunities. Blockchain technology holds the promise to allow for a broad swath of novel use cases for securities, fostering new kinds of market activities that many of the Commission’s legacy rules and regulations do not contemplate today.
In order for the United States to be the “crypto capital of the planet” as envisioned by th President.
