- Key insight: Securities and Exchange Commission Chair Paul Atkins said Tuesday the Trump administration's push for crypto innovation will spill over into the banking sector.
- Expert quote: "Through what we're calling Project Crypto, we are taking historic steps to modernize our rules and regulations to facilitate markets moving on-chain." —Paul Atkins, chair of the Securities and Exchange Commission.
- Forward Look: Atkins said he has suggested changes to the Basel III capital rule that could reduce the incentive banks have to lend to private equity and private credit firms rather than small and medium-size businesses.
NEW YORK — Tokenized deposits could get the green light from market regulators as soon as next year.
Paul Atkins, chairman of the Securities and Exchange Commission, said in a speech here Tuesday that authorizing tokenized deposits is one of several ways federal regulators are helping traditional financial instruments incorporate distributed ledger — or blockchain — technology.
"We've already approved, now,
The comment came during an onstage interview with Larry Kudlow, the Fox Business commentator and former director of the National Economic Council.
Earlier in the afternoon, Atkins delivered a speech extolling the virtues of free markets and regulatory clarity. He pointed to ongoing efforts to roll back
"Over the past year we have moved purposefully to answer President [Donald] Trump's call to make America the crypto capital of the world," Atkins said in his prepared remarks. "Through what we're calling Project Crypto, we are taking historic steps to modernize our rules and regulations to facilitate markets moving
Atkins had high praise for digital asset technology during his speech, calling it "the most consequential financial frontier of our time." He said the deliberate uncertainty of Biden-era crypto policies resulted in "an entire generation of digital asset innovation" being developed in other countries.
Atkins said his goal was not to advantage the crypto sector over traditional finance or give preference to any individual firms, but rather to allow it to develop as the market sees fit.
"To be clear, this is not a favor to industry," he said. "It's what markets require to function: Clear rules of the road apply without preference."
As a candidate in 2024, Trump was an ardent supporter of the crypto industry and even flirted with the idea of creating a
During the question-and-answer session of the event, Kudlow asked Atkins if he saw crypto as being a currency in a traditional sense, an investment asset or something else. Atkins said that, too, was up to the market to decide.
"It's not for me to say any particular cryptocurrency or solution is good or not, but to allow the market to do it," Atkins said.
Atkins said he has worked closely with heads of other regulatory agencies to squash the so-called "turf wars" — interagency disputes over jurisdiction — that have stymied crypto and other financial sector innovations.
That collaborative approach has extended to the bank regulators, too. Along with shared work on tokenized deposits, Atkins said he has been in communication with the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency about their ongoing effort to finalize their Basel III capital rules.
Specifically, Atkins said he urged them to adopt rules that would rollback requirements that are driving banks to lend to private equity and private credit firms instead of providing credit to small and medium-size businesses directly. He said the heads of the other agencies have been receptive to his suggestions.
"There's no turf war anymore," he said. "We're all out to try to achieve things."
