A Comprehensive Understanding of How U.S. Policies Promote the Development Momentum of Tokenization

Author: Chainlink Labs Government Affairs Team

Today, tokenization is becoming an important part of the development of financial markets. Institutions convert real-world assets into tokens on public blockchains, which can improve the efficiency, transparency, and accessibility of the value transfer system.

Across the United States, financial institutions, infrastructure providers, and decision-makers are actively exploring how to integrate tokenized assets into a broader market system. The underlying technology of tokenization is also used to support stablecoins, tokenized government bonds, funds, and other financial instruments. The next step is to establish a corresponding regulatory environment to promote this transformation.

This article will explore the three major regulatory challenges faced by the United States in the field of tokenization and propose three specific measures that decision-makers can take to address these challenges.

Three Major Challenges Facing the United States in the Tokenization Field

Challenge 1: How to classify token assets?

The biggest regulatory uncertainty in tokenization is the lack of a unified classification standard in law. Currently, U.S. law has not established a uniform classification standard for digital assets. Therefore, token assets are often classified based on specific circumstances, lacking a unified standard. For example, stablecoins backed by fiat currency may be classified as payment tools, value storage products, securities, funds, or bank deposits. How they are specifically categorized depends on the structure of the stablecoin and who the evaluator is. Many issuers intentionally avoid paying interest or realizing profit functions to prevent being classified as securities.

Tokenized government bond products also face similar challenges. Although U.S. Treasury bonds do not need to be registered with the SEC, packaging them into token products may trigger the Investment Company Act. In other cases, returns or splits may prompt regulators to view tokens as securities. Due to the lack of clear definitions, many companies have to heed the advice of their legal teams and make conservative product design decisions to avoid regulatory risks. Additionally, the unresolved issue of underlying classification prevents decision-makers from formulating targeted regulations. U.S. regulators can only enable the market to operate legally outside the gray area by implementing unified classification standards for token assets and defining these standards at the legal level.

Challenge Two: What interoperability standards should be established?

The core idea of tokenization is that digital assets should flow freely across various blockchains, platforms, and financial institutions, just as data flows easily and reliably on the internet. Theoretically, this vision has already been realized. Interoperability protocols like Chainlink CCIP allow token assets to be transmitted across different blockchains and systems.

Despite the continuous development of infrastructure, policy responses have been relatively lagging. Currently, the United States does not have a clear regulatory framework to explain the compliance obligations that token assets should adhere to when being transferred across systems. Moreover, once assets leave their native environment, various issues surrounding custody, trading restrictions, investor protection, and compliance obligations persist.

For example, when tokenized funds are transferred from one chain to another, there is sometimes uncertainty about whether the blockchain environment receiving the assets must meet the same licensing or regulatory standards. If institutions are unclear about what the regulatory requirements are, they may hesitate to easily transfer assets across chains. This uncertainty reduces market confidence, fragments liquidity, and limits the widespread adoption of the token market.

Challenge Three: What exactly is limiting mainstream users from entering the market?

People often say that tokenization can lower barriers to entry and make financial products more trustworthy, thereby allowing more people to participate in the financial market. However, today, most U.S. customers find it difficult to access token assets on existing platforms.

One of the main reasons is that regulated tokenized products are often only allowed to be issued privately or can only be issued to qualified investors. Furthermore, market regulatory rules are chaotic and complex, such as each country having different remittance regulations, brokers needing to register, or needing to design specialized trust licenses for specific types of trust businesses or financial activities. All of this makes it difficult for most platforms targeting retail clients to launch tokenized products on a large scale.

This will lead to market differentiation, where institutional investors and high-net-worth individuals can gain priority access to the tokenized market, while retail customers are left out in the cold. Without clear regulatory guidelines for retail customers, many platforms will only operate in a limited scope or offshore.

Additionally, there is a gap in public perception. Many customers do not understand what tokenized assets are, the differences between these assets and traditional products, and what value features such as reserve proof, automated compliance, or 24/7 liquidity will bring to them. Due to the lack of regulatory foundations and viable use cases in the market, the public's understanding and trust in tokenized assets has been difficult to enhance.

How U.S. Policies Clear Obstacles for Tokenization Development

Solution One: Clearly Define the Specific Definition of Token Assets

Many of the legal uncertainties surrounding tokenization arise from a lack of clear and unified definitions. Due to the absence of a standardized classification for digital financial instruments, developers, financial institutions, and regulators can only rely on 20th-century laws to interpret 21st-century products. This legal ambiguity often leads institutions to adopt a conservative approach when designing products and to avoid risks in their legal positioning, resulting in varying treatment among different institutions.

The introduction of the "GENIUS Act" in 2025 has propelled the development of this field, and the act has now passed a Senate vote, providing a legal framework for fiat-collateralized stablecoins. The act clearly states that well-structured stablecoins do not fall under the category of securities, significantly boosting the confidence of issuers and users. Other asset classes also require equally clear definitions, such as tokenized government bonds, funds, and real-world assets.

The new drafts will give rise to important legislation that will change market structures and are expected to provide more comprehensive coverage of this issue. These proposals do not advocate for forcibly classifying token products as "securities" or "commodities," but rather aim to classify them based on the functional structure and risk profile of digital assets. Clarifying the definition of token assets will lay a more solid legal foundation for the entire industry, allowing regulators to implement more unified regulatory provisions based on this foundation.

Solution Two: Develop Interoperability Policy Standards

Currently, U.S. regulatory requirements do not clarify how obligations such as custody, trading restrictions, or investor protection apply to cross-chain or cross-platform use cases. This creates friction for institutional operations, and clear regulations are necessary for institutions to operate smoothly across networks. Many institutions prefer to keep assets in closed environments, as it is easier to manage legal liabilities in such settings.

The "GENIUS Act" guides regulators to establish interoperability standards for payment stablecoins, making significant progress. However, these standards still lack comprehensive coverage. Corresponding standards also need to be established for other tokenized assets such as government bonds, funds, and real-world assets.

Policymakers can establish a regulatory framework that allows compliance obligations and assets to transfer synchronously across systems, thereby narrowing the gap. This includes formulating unified policies, providing joint guidance to institutions, or conducting clearly structured pilot projects, enabling enterprises to explore interoperability use cases within a clear regulatory framework.

With a clear set of interoperability standards in place, enterprises can confidently and boldly develop real-world use cases, ensuring that tokenized assets can be transferred across systems not only technically but also legally.

Solution Three: Laying the Foundation for Mainstream Users to Enter the World of Token Assets

To bring more mainstream users into the world of token assets, clearer rules need to be established to regulate how these products can be safely and compliantly sold to the public. Although public interest in token assets is continuously rising, many institutions are still constrained by regulatory frameworks that did not take the emergence of tokenized finance into account when they were originally established.

Decision-makers now have the opportunity to lower these barriers by establishing a new framework that allows more retail customers to participate, while not compromising trust and regulation. Measures that can be taken include refining the licensing pathways for tokenized product platforms, clarifying the asset classes suitable for general use, and developing unified standards around risk disclosure, custody, and investor protection.

These changes will enhance the confidence of issuing institutions in publicly offering tokenized assets; they will also help consumers better understand these products. By combining public education, transparency, and responsible distribution mechanisms, we can ensure that the development of tokenization benefits not only institutions but also ordinary customers.

Summary

Tokenization is a once-in-decades opportunity that will drive the modernization of financial markets. This technology has matured, and institutional demand is genuine. There is an urgent need to establish a regulatory environment and vigorously promote market development and construction.

The United States does not need to start from scratch to establish a system, but rather needs to advance the following three aspects: clearly delineate regulatory responsibilities; define digital assets clearly at the legal level; and establish a feasible market entry path for tokenized products. The "GENIUS Act", subsequent updates to various market structure bills, and the "Tokenization Report Act" all point in the right direction, and now we need to take action.

With the right legal framework, the United States can establish a credible, secure, and scalable token asset market, leading the global development of token assets.