Kraken Meets SEC to Discuss Tokenisation Frameworks

Kraken, one of the world’s leading cryptocurrency exchanges, recently held a private meeting with the US Securities and Exchange Commission’s (SEC) crypto task force to discuss the future of tokenisation in financial markets.

Overview

The closed-door session signals a growing willingness from regulators and industry leaders to explore how blockchain-powered tokenisation could reshape securities, trading, and compliance frameworks.

According to the memorandum, the agenda was to discuss the tokenised trading system, the regulatory framework and legal requirements for operating the system, and the potential benefits of tokenisation. The filing also revealed that SEC staff held a meeting with four representatives from Payward, Inc. and Kraken Securities LLC, along with two attorneys from Wilmer Cutler Pickering Hale and Dorr LLP.

Tokenisation Gains Momentum in US Policy Circles

Tokenisation — representing real-world assets like equities, bonds, real estate, or commodities as digital tokens on a blockchain — has emerged as a hot topic in global finance. It promises faster settlement, reduced intermediaries, and expanded access to traditionally illiquid asset classes.

Regulators like the SEC face the challenge of balancing innovation with investor protection. While tokenised assets can increase efficiency and transparency, they also raise questions about custody, disclosure, and the classification of digital assets as securities.

Kraken, which has already launched tokenisation initiatives in Europe and recently expanded its custodial services for institutional clients, used the meeting to present insights from its international operations. According to sources familiar with the discussion, the exchange highlighted how tokenisation pilots in jurisdictions such as the European Union and Singapore are being conducted under clearer regulatory frameworks, contrasting with the United States’ fragmented approach.

By engaging directly with the SEC’s crypto task force, Kraken aims to shape the conversation around rules that could govern tokenised securities and prevent the US from falling behind in the global race toward digitised capital markets.

Bridging the Gap Between Innovation and Regulation

The meeting reportedly focused on three main areas:

Investor Protection: Kraken presented mechanisms for ensuring transparency and compliance, such as real-time auditing of tokenised assets and on-chain reporting.

Market Structure: Discussions included how tokenised securities could be integrated into existing trading platforms and clearing systems, while maintaining fair market practices.

Global Competitiveness: Kraken emphasised that other financial hubs, including Hong Kong and Switzerland, already offer regulatory clarity on tokenised markets, potentially drawing investment away from the US if domestic rules remain ambiguous.

Under Chair Gary Gensler, the SEC has consistently stated that most cryptocurrencies fall under existing securities laws. However, tokenisation introduces new complexities, particularly when representing traditional financial instruments. Industry advocates argue that tokenised assets, unlike utility tokens, should have a tailored regulatory framework to accommodate innovation and investor safeguards.

The dialogue between Kraken and the SEC marks a step toward bridging the gap. By addressing concerns early, industry leaders hope regulators will design rules encouraging experimentation while protecting consumers from systemic risks.

Implications for the Future of Digital Markets

The significance of this meeting extends beyond Kraken’s individual interests. Tokenisation is widely considered a cornerstone of the next wave of digital finance, with major institutions such as BlackRock and JPMorgan already piloting tokenised funds and payment systems.

For retail investors, tokenisation could eventually mean fractional access to assets once limited to high-net-worth individuals, like real estate portfolios or corporate bonds.

For institutions, it promises efficiency gains through near-instant settlement and programmable compliance. However, the US risks lagging behind global competitors without a clear regulatory roadmap. Kraken’s engagement with the SEC may accelerate the rulemaking process, encouraging other exchanges, custodians, and financial institutions to participate in similar discussions.

Collaboration between regulators and industry players will be critical as tokenisation moves from theory to practice. The Kraken-SEC meeting illustrates that dialogue is underway, and the coming months may bring concrete proposals on how the US can lead in building secure, transparent, and efficient tokenised markets.