The House Financial Services Committee held its most significant hearing yet on securities tokenization Wednesday, with members of both parties broadly agreeing that tokenized securities require the same regulatory guardrails as traditional trading.
The session arrived as the real-world asset market surpassed $26 billion on-chain, and as three major Wall Street firms moved deeper into tokenized finance within the same week.
Democrats used the hearing to raise pointed conflict-of-interest concerns about the Trump family's cryptocurrency holdings.
The hearing, titled "Tokenization and the Future of Securities: Modernizing Our Capital Markets," was chaired by Rep. French Hill (R-Ark.), who framed the session around regulatory readiness rather than debating the technology's merits.
"We obviously are going to maintain market integrity, no matter what technology we select," Hill said.
SEC Chairman Paul Atkins has separately said his agency is close to issuing a formal tokenization rule proposal and will offer an innovation exemption allowing firms to test new platforms without immediate registration requirements.
Where Both Parties Agree - and Where They Don't
Industry witnesses and lawmakers across party lines treated tokenization as an infrastructure question, not a speculative one.
Blockchain Association CEO Summer Mersinger argued that non-custodial DeFi infrastructure removes costly intermediaries and warrants a distinct regulatory approach from entities that exercise custody or control over user assets.
Ken Bentsen, who leads the Securities Industry and Financial Markets Association, said new entrants should face the same rules as incumbents.
Democrats, led by ranking member Rep. Maxine Waters (D-Calif.), raised concerns including anonymous wallets that could mask foreign ownership, know-your-customer gaps, and the risk of accelerating market gamification. "Tokenization could make those trades faster, always on, and with fewer guardrails," Waters said.
Trump Family Interests Draw Democratic Fire
Democratic members repeatedly questioned the impartiality of the administration's crypto push.
Waters said the Trump family has earned an estimated $1 billion from cryptocurrency ventures, including a stake in World Liberty Financial, which recently struck a deal with Securitize to tokenize loan revenue tied to hotel projects.
Salman Banaei, general counsel at tokenization firm Plume and a former SEC and CFTC official, said Trump family involvement has "unfortunately created a cloud over the legitimacy of moving forward on this important market structure legislation."
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Industry Moves Ahead of the Rules
The hearing coincided with a flurry of institutional activity.
Invesco, with $2.2 trillion in assets under management, took over management of Superstate's $900 million tokenized Treasury fund USTB, joining BlackRock, Franklin Templeton, and Fidelity in the $12 billion tokenized-Treasury market.
BlackRock CEO Larry Fink argued in his annual shareholder letter this week that tokenization could "update the plumbing of the financial system."
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