Former Sec Counsel Explains What It Takes To Make Rwas Compliant

The SEC’s changing approach to crypto is supporting RWA growth, but jurisdictional and yield constraints continue to limit compliant models.

The key constraint on real-world assets (RWAs) has been regulatory engagement rather than technology, and that dynamic has been shifting in the US, said Ashley Ebersole, chief legal officer of Sologenic.

Ebersole joined the Securities and Exchange Commission (SEC) in early 2015, where he served in the agency’s early internal working groups on crypto and the application of securities law to blockchain-based assets.

The securities regulator published the DAO Report in 2017, asserting its jurisdiction over tokens that met the definition of securities. What followed was an enforcement-led approach that left little room for sustained dialogue with the industry.

“After the DAO Report, it was an enforcement response for the next two years. I expected there would be more of a rotation toward policy while I was still there — that didn’t happen,” he told Cointelegraph.

Ebersole said that posture hardened after he left the agency, shortly before Gary Gensler took the helm in April 2021. From private practice, he continued engaging with the SEC until staff were later discouraged from interacting with crypto firms.

The communication breakdown made it difficult for companies to design legally compliant RWA products and delayed the development of onchain securities models that are now moving into production.

The market for tokenized real-world assets is scaling quickly. Standard Chartered has projected that the value of non-stablecoin RWAs could reach $2 trillion by 2028, driven largely by tokenized equities, funds and other traditional financial instruments migrating onto blockchains.

Major financial institutions are positioning for that shift. BlackRock is reportedly exploring tokenization to modernize fund infrastructure, while JPMorgan has launched tokenized money-market products on Ethereum.

“There is a right way to do compliant tokenization and issue tokenized assets. It absolutely can be done,” Ebersole said.

Source: CoinTelegraph