SEC Proposes Blockchain Ledgers as Official Records for Tokenized Securities

The U.S. Securities and Exchange Commission has proposed a comprehensive modernization of transfer agent rules to allow blockchain ledgers to serve as the official record of securities ownership. The move seeks to resolve long-standing legal uncertainties and operational frictions associated with tokenized assets.

Under the new proposal, blockchain ledgers could act as the "master security file" rather than serving as a mere copy of a traditional off-chain database. This update targets registration, reporting, and safeguarding requirements that were originally designed for paper-certificate markets. Additionally, the SEC suggests accelerating the processing window for mailed documents, reducing the current 3-5 day timeframe to just one day. The proposal is currently open for a 60-day public comment period, which is set to conclude in early November 2026.

The End of the Two-Ledger System

Currently, tokenized securities typically rely on a "two-ledger" system: an on-chain token ledger used for trading and a separate, legally recognized off-chain shareholder register. This duality creates significant legal risk, as off-chain records are generally prioritized during insolvency or bankruptcy proceedings, even if the blockchain data is more current.

"The master securityholder file used to be paper in a filing cabinet... Today it is a database," said Joris Delanoue, CEO of Fairmint, via CoinDesk. "The proposal recognizes that blockchain can be that database, not merely a copy of it."

Industry Implications

By recognizing blockchain as the authoritative register, the SEC could transition tokenization from a supplementary layer to the primary infrastructure of the securities market. This shift would reduce reconciliation costs and minimize the risk of conflicting ownership records.

However, the transition comes with increased operational requirements. Digital transfer agents will not be exempt from traditional administrative burdens; they must still manage shareholder deaths, inheritance, and legal notices. As Delanoue noted, "There is no more free lunch. If you want to maintain the official ownership record, you have to operate the full transfer-agent function."

Legal and Market Outlook

The proposal addresses a critical vulnerability in the current digital asset framework. Eli Cohen, CLO of Centrifuge, told CoinDesk that without this clarity, an insolvency or bankruptcy event "would be just a mess."

Market participants are now watching to see how the SEC incorporates public feedback before finalizing the rules. The primary focus remains on whether the agency can successfully balance the efficiency of distributed ledger technology with the rigorous safeguarding and reporting standards required of registered transfer agents.