SEC Proposal Could Let Blockchains Serve as Official Securities Records

The U.S. Securities and Exchange Commission last week proposed a major overhaul of decades-old transfer agent rules that would explicitly allow electronic databases, including blockchain ledgers, to serve as the official record of securities ownership. According to ChainCatcher, if approved, the proposal could make blockchain the primary securities record and reduce reliance on off-chain parallel ownership records used by tokenized securities. Many tokenized securities currently operate with two records: an on-chain token ledger and an official shareholder register. Under the proposal, issuers and transfer agents may no longer need to maintain duplicate records and reconcile them after each transfer, which could reduce operational friction and the risk of mismatches between blockchain records and legally recognized records. Eli Cohen, chief legal officer at tokenized fund platform Centrifuge, said the proposal could turn the current two-step process into one step by letting blockchain itself act as the primary securities record. The proposal does not mean tokenized securities would become fully permissionless. Joris Delanoue, CEO of SEC-registered on-chain transfer agent Fairmint, said blockchain can remain open, but assets would still need to follow ownership and transfer rules, with identity checks and transfer restrictions built into the tokens. Transfer agents would still handle administrative tasks such as shareholder deaths, inheritance, and legal notices, and the processing window could shrink from 3-5 days to 1 day. The proposal's 60-day public comment period is set to end in early November.