Tokenisation Decision Made: Now Comes the Hard Part!
Updated: Oct 7
On 25 March 2026, the US House Financial Services Committee held what may prove to be a defining moment for the global tokenised securities industry.
In a hearing titled "Tokenization and the Future of Securities: Modernizing Our Capital Markets," committee members across both parties reached a striking bipartisan conclusion: tokenised securities are coming, and the existing regulatory framework does not adequately cover them.
What happens next in Washington will shape the global market, including the UK's own regulatory positioning.
The Hearing
The session was called against a backdrop of a $26.48 billion tokenised RWA market (at the time of the hearing), with BlackRock, JPMorgan, Franklin Templeton, and Circle all having deployed institutional-grade tokenised products at scale. The market had grown from a rounding error to a systemic consideration in under three years.
Committee Chairman French Hill used his opening statement to frame tokenisation not as a fintech story but as a capital markets infrastructure story, calling it a change to how securities "are issued, traded, and recorded" at a foundational level. That framing matters: it signals that lawmakers are treating this with the same seriousness as the 1975 Securities Acts Amendments, which created the National Market System.
The hearing centred on the CLARITY Act, which passed the House in July 2025 with a 294–134 bipartisan majority and is currently advancing through Senate Banking Committee markup, targeted for the second half of April 2026.
What the CLARITY Act Does
The CLARITY Act is designed to resolve the central regulatory ambiguity that has held back institutional tokenisation in the US: is a given tokenised asset a digital security (under SEC jurisdiction) or a digital commodity (under CFTC jurisdiction)?
The current patchwork (where that determination is made case by case, often through enforcement action) has been named by 66% of institutional investors as a reason not to invest in digital assets, according to a January 2026 EY-Parthenon and Coinbase survey.
The CLARITY Act would make that determination by statute, creating a defined framework that firms can build products around.
Statutory criteria for distinguishing digital securities from digital commodities
A unified registration framework for tokenised securities issuers
Safe harbour provisions for companies in the process of transitioning to full compliance
Interoperability requirements to ensure tokenised securities can settle across different blockchain networks
Why the Outcome Matters Beyond the US
The US accounts for the largest single pool of institutional capital globally. When US rules clarify which tokenised products are legal, compliant instruments, capital that has been sitting on the sidelines will begin moving. That capital will seek jurisdictions and platforms that are ready to receive it.
For UK founders tokenising equity, this creates both opportunity and urgency. The opportunity: well-structured UK tokenised securities that meet US standards could attract US institutional capital. The urgency: if the UK's own regulatory framework (the FCA's cryptoasset regime, whose application window opened on 30 September 2026 ahead of the regime starting on 25 October 2027, and the emerging PISCES infrastructure for private companies) does not achieve mutual recognition or interoperability with US standards, UK issuers risk being locked out of the world's deepest capital pool.
The FCA and HM Treasury have been closely following the CLARITY Act proceedings. UK responses to the EU DLT Pilot Regime's early results, and to the March 2026 Congressional hearing, are expected to feature in the FCA's next consultation update on its tokenised securities framework.
The Open Questions
The hearing clarified the direction without resolving all the hard questions. Witnesses raised concerns that remain live issues:
Custody: Who holds the underlying assets if the blockchain record diverges from legacy systems during a settlement failure?
Investor protection: How do retail investor protections (prospectus requirements, cooling-off periods, know-your-customer obligations) apply to 24/7 on-chain secondary markets?
Cross-border recognition: If a tokenised security is issued under Lise's French DLT framework, can it trade on a CLARITY Act-compliant US platform? The hearing did not answer this.
Smart contract liability: If an automated smart contract executes a trade that violates a court order or sanctions requirement, who bears legal responsibility?
These are not merely academic questions. They are the questions that issuers, founders, and investors building tokenised equity structures will face when their products reach maturity.
Key Takeaways
The US House Financial Services Committee held a landmark tokenisation hearing on 25 March 2026, with bipartisan consensus that tokenised securities are inevitable and current regulation is inadequate.
The CLARITY Act, which passed the House 294–134 in July 2025, is advancing through Senate markup in April 2026; it will define whether tokenised assets are SEC or CFTC instruments.
66% of institutional investors cited regulatory uncertainty as the primary reason to avoid digital asset investment (EY-Parthenon/Coinbase, January 2026).
US regulatory clarity will unlock institutional capital that will flow to jurisdictions and platforms ready to receive it, putting pressure on UK regulators to accelerate.
Key unresolved issues include custody liability, retail investor protections, cross-border recognition, and smart contract legal responsibility.
How we got here
The hearing heard from Kenneth Bentsen Jr., president and chief executive of SIFMA, and Summer Mersinger, chief executive of the Blockchain Association. The SIFMA evidence focused on the infrastructure that would have to adapt, from clearing houses and custodians to transfer agents and trading venues. Mersinger argued that the lack of a clear legal framework for tokenised securities was slowing the build of production grade infrastructure.
Two regulatory moves came in the days before. On 17 March 2026 the SEC and CFTC issued a joint interpretive release that set out a five category token taxonomy and named 16 crypto assets as digital commodities. It is guidance, not statute. Days before the hearing, the SEC also approved a Nasdaq proposal allowing tokenised securities to trade alongside traditional shares on the same order book.
The Senate did not meet the April target. The CLARITY Act, H.R. 3633, passed the House on 17 July 2025. The Senate Banking Committee released a 309 page compromise text on 12 May 2026 and advanced the bill by 15 votes to 9 on 14 May. By mid August 2026 the bill had still not passed the full Senate, and the length of a transition window after enactment remained under negotiation.
What it means for UK founders
The UK timetable is now fixed in a way the US one is not. Under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, the FCA authorisation gateway opened on 30 September 2026 and the new cryptoasset regime commences on 25 October 2027. Tokenised shares in a UK company are still shares, so they are governed by existing securities law rather than the cryptoasset regime. For private company trading and blockchain settlement, PISCES and the Digital Securities Sandbox remain the main routes.
For founders hoping to raise from US institutions, the practical step is to keep structures simple and records clean, so that a UK issued token can be mapped onto whichever classification the US finally settles on. Founders may want to take professional advice in both jurisdictions before offering tokenised shares to US investors.
Key facts at a glance
25 March 2026: House Financial Services Committee hearing, "Tokenization and the Future of Securities: Modernizing Our Capital Markets".
Witnesses included Kenneth Bentsen Jr. of SIFMA and Summer Mersinger of the Blockchain Association.
17 March 2026: SEC and CFTC joint interpretive release names 16 crypto assets as digital commodities.
17 July 2025: the CLARITY Act passed the House by 294 votes to 134.
14 May 2026: the Senate Banking Committee advanced the bill by 15 votes to 9.
25 October 2027: the UK cryptoasset regime commences.
Sources
Frequently asked questions
What did the US House Financial Services Committee conclude about tokenisation in March 2026?
At a hearing on 25 March 2026, members of both parties agreed that tokenised securities are coming and that the existing regulatory framework does not adequately cover them.
What does the CLARITY Act do for tokenised securities?
The CLARITY Act would set statutory criteria for deciding whether a tokenised asset is a digital security under SEC jurisdiction or a digital commodity under CFTC jurisdiction. It also proposes a unified registration framework, safe harbour provisions and interoperability requirements.
When did the CLARITY Act pass the US House of Representatives?
The CLARITY Act passed the House in July 2025 by a bipartisan majority of 294 to 134. At the time of the hearing it was advancing through Senate Banking Committee markup, targeted for the second half of April 2026.
Why does US tokenisation regulation matter for UK founders?
Clear US rules could release institutional capital that flows to jurisdictions ready to receive it. If the UK framework, including the FCA cryptoasset regime and PISCES, does not achieve recognition or interoperability with US standards, UK issuers risk being locked out of that capital.
What tokenisation questions did the March 2026 Congressional hearing leave unresolved?
Open issues include custody when blockchain records diverge from legacy systems, how retail investor protections apply to 24/7 on-chain markets, cross-border recognition of tokenised securities, and legal responsibility for smart contract actions.
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