SEC proposal would let blockchain serve as official securities ledger

The U.S. Securities and Exchange Commission has proposed replacing decades-old transfer agent rules with a framework that would recognize blockchain ledgers as official securities ownership records.
Summary

• Blockchain databases could become the legally recognized ownership record for tokenized securities.
• Issuers may no longer need separate on-chain and official shareholder ledgers.
• Identity checks and transfer limits would continue to apply to blockchain-based securities.
• The SEC has opened a 60-day public comment period ending in early November.

SEC proposal could remove duplicate ownership records

The SEC said its proposed transfer agent overhaul would recognize electronic databases, including distributed ledgers, as systems that can hold the official record of securities ownership. The change would update rules created before blockchain-based securities entered U.S. capital markets.

Under many current tokenization models, an on-chain token does not serve as the final legal record of ownership. Transfer agents and issuers instead maintain a separate shareholder register outside the blockchain, while the digital token tracks transfers on-chain.

Operating both systems requires the parties to compare their records after transactions. A difference between the blockchain ledger and the legally recognized register can create uncertainty over which party owns the underlying security.
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Under the SEC proposal, a qualifying blockchain ledger could become the main ownership record rather than a parallel database. Transfer agents could use the ledger to register holders and record changes without recreating each transaction in another system.

Eli Cohen, chief legal officer at tokenized fund platform Centrifuge, said the plan could reduce the existing "two-step" model to a "one-step" process. In his assessment, the blockchain itself could serve as the master securityholder file once the rules permit it.

The change remains a proposal and would not automatically approve every blockchain network or token structure for official recordkeeping. Transfer agents using the technology would still have to meet the SEC's rules for registration, record accuracy, asset protection and regulatory reporting.

Blockchain records would not make securities permissionless

Although a public blockchain may allow anyone to view its transaction history, the securities recorded on it would remain subject to U.S. ownership and transfer rules.

Joris Delanoue, CEO of registered on-chain transfer agent Fairmint, said compliance controls would still sit inside the asset's operating structure. Tokenized securities could require identity verification, investor eligibility checks, and restrictions on transfers to unapproved wallets.

A transfer agent would remain responsible for maintaining accurate ownership information and processing changes that cannot be completed through an ordinary token transfer. Such duties can include handling inheritance, responding to legal notices, and updating records after a shareholder's death.

According to Delanoue, blockchain-based processing could reduce the time needed for some administrative actions from three to five days to about one day. The technology would change how ownership instructions are recorded and processed, but it would not remove the transfer agent's legal responsibilities.

Smart contracts could also enforce some restrictions before a transaction reaches the ledger. Depending on the security and its offering terms, a transfer could be blocked when a wallet has not completed the required checks or when the recipient is not allowed to own the asset.

For U.S. investors, the distinction separates regulated tokenized securities from crypto assets that can move freely between wallets. A blockchain entry may become the official ownership record, but the owner would still need to satisfy the rules attached to the security.

Tokenized securities could gain a single source of ownership data

Allowing one ledger to serve as the official register could remove the need to reconcile two ownership databases after every transfer, according to Cohen's assessment of the proposal.

Transfer agents currently perform several functions beyond recording purchases and sales. The SEC's investor guidance says they track changes in ownership, maintains issuer records, and distributes payments such as dividends to registered holders.

Using a blockchain as the main record could place transaction history and the legally recognized shareholder list in the same system. Issuers and transfer agents would still need controls for correcting errors, responding to court orders, and restoring access when an investor loses the credentials needed to control a wallet.

The SEC proposal also raises operational questions about ledgers that are not controlled solely by a transfer agent. Its rulemaking process seeks public input before the commission decides whether to revise the text and adopt a final rule.

A blockchain's role as the official ledger would therefore depend on the requirements included in any final version. Record integrity, cybersecurity, access controls and the ability to process legally required changes remain central to the transfer agent's work.

Institutional projects are already building regulated services around similar controls. On Sep. 10, crypto.news reported that Cosmos had formed a 17-company partner network covering custody, compliance, security, and infrastructure for banks using its tokenization system.

Cosmos Chief Commercial Officer Eran Barak said banks using the network must select their own providers, sign separate agreements, and retain responsibility for compliance decisions. Wells Fargo plans to use Cosmos ledger technology for an initial cross-border tokenized deposit project in fall 2026, according to Barak.

SEC rules could shape U.S. stock token models

The transfer agent proposal applies to the records behind regulated securities rather than every product that tracks the price of a stock.

Some stock tokens give users financial exposure to a company without placing them on the company's official shareholder register. Such products can differ from issuer-backed tokenized shares that carry ownership rights and appear in records maintained by a registered transfer agent.

The difference has become a point of dispute among U.S. companies and trading platforms. Robinhood CEO Vlad Tenev recently rejected AMC's demand to stop offering tokens tied to the cinema operator's shares, arguing that a third-party product does not require the issuer's consent.

AMC CEO Adam Aron had challenged the tokens because the company did not issue or approve them. Robinhood's products were offered outside the United States, while the SEC proposal concerns the regulated recordkeeping system that supports securities ownership under U.S. law.

Issuer-backed tokenization follows a different structure because the digital entry can represent the security itself. If adopted, the SEC's transfer agent revisions could give such issuers a clearer route for treating an on-chain entry as the controlling ownership record.

The proposal would not remove other securities-law duties tied to an offering or trading venue. Registration requirements, investor disclosures, broker-dealer rules, and restrictions attached to private securities would continue to depend on the product and transaction.

Public comments will remain open for 60 days, with the period due to close in early November. The SEC can revise the proposal after reviewing submissions before deciding whether to hold a vote on a final rule.
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