The House Financial Services Committee convenes its most significant tokenization hearing to date on March 25, 2026, at 10:00 AM EDT. The session, titled "Tokenization and the Future of Securities: Modernizing Our Capital Markets," arrives at a moment when the market has already moved ahead of th...
"Invesco has been strategically building the capabilities required to support institutional-grade digital asset products. Superstate's onchain infrastructure pairs naturally to support Invesco's ambitions to scale tokenized offerings over time." — Kathleen Wrynn, Global Head of Digital Assets, Invesco
The House Financial Services Committee convenes its most significant tokenization hearing to date on March 25, 2026, at 10:00 AM EDT. The session, titled "Tokenization and the Future of Securities: Modernizing Our Capital Markets," arrives at a moment when the market has already moved ahead of the law. On-chain real-world assets stand at $26.48 billion in distributed value as of March 23, according to rwa.xyz, up 5.25% in 30 days. The represented asset value — including platform-locked tokens — reaches $387.35 billion.
The hearing examines two draft bills and follows three regulatory actions in the span of eight days: the SEC-CFTC joint token taxonomy (March 17), the SEC's approval of Nasdaq's tokenized securities trading proposal (March 18), and Invesco's acquisition of Superstate's $900 million tokenized Treasury fund (March 24). Taken together, these events represent the most compressed period of institutional tokenization activity since blockchain entered capital markets discourse.
The central tension is structural. Current securities law assumes T+1 settlement, market hours, and paper-based intermediaries. Tokenized assets settle in seconds, trade around the clock, and exist simultaneously as digital tokens and regulated instruments. The two bills under discussion attempt to resolve this without dismantling the existing regulatory framework.
Room 2128 of the Rayburn House Office Building will host testimony from four witnesses representing distinct segments of the market infrastructure:
The committee will examine two draft bills:
Modernizing Markets Through Tokenization Act — Requires the SEC and CFTC to conduct a joint study on whether additional guidance or rules are necessary to facilitate tokenized securities and derivatives. The bill forces the two agencies to resolve jurisdictional ambiguity before the market outgrows their regulatory frameworks.
Capital Markets Technology Modernization Act — Clarifies that broker-dealers, transfer agents, and financial advisors can use blockchain-based record-keeping consistent with existing SEC rules. This codifies what several firms have already begun doing under individual exemptions.
The witness list is notable for what it signals: legacy infrastructure operators (DTCC, Nasdaq, SIFMA) sitting alongside blockchain advocates. The hearing is not about whether tokenization should happen. It is about who controls the settlement layer.
The tokenized RWA market breaks down into several sub-sectors, each with distinct growth trajectories:
| Asset Class | On-Chain Value (March 2026) | Year-Over-Year Change | |---|---|---| | U.S. Treasuries | $5.8 billion | +700% from March 2025 | | Private Credit | $3.2 billion | +180% from January 2025 | | Tokenized Equities | Nascent (Nasdaq pilot pending) | First trades expected Q3 2026 | | Total Distributed On-Chain | $26.48 billion | +5.25% in 30 days | | Total Represented (incl. locked) | $387.35 billion | — |
The gap between distributed on-chain value ($26.48 billion) and represented value ($387.35 billion) is significant. It reflects the reality that most institutional tokenization remains confined to permissioned systems. The distributed figure represents assets that can be actively transferred between wallets on public or semi-public blockchains. The larger number includes tokens locked in private, platform-specific environments — technically tokenized but not interoperable.
This distinction matters for the hearing. If Congress legislates only for the $26.48 billion of freely transferable tokens, it ignores the $360 billion in platform-locked institutional value. If it legislates for the full $387 billion, it may impose public-blockchain rules on private infrastructure that functions more like traditional databases with token wrappers.
On March 18, the SEC approved Nasdaq's proposed rule change to allow certain securities to trade in tokenized form. The framework works as follows:
The design is deliberately conservative. Tokenized shares are not a new asset class — they are an alternative delivery mechanism for existing securities. The same stock, same rights, same ticker, different settlement infrastructure. This approach avoids the classification battles that have consumed crypto regulation for a decade.
The limitation to Russell 1000 names is pragmatic. These are the most liquid, most scrutinized equities in U.S. markets. If tokenized settlement works for Apple and Microsoft, the argument for extending it to smaller companies becomes harder to resist.
The DTCC received SEC no-action relief on December 11, 2025, to operate a three-year pilot tokenizing DTC-custodied assets on supported blockchains. The infrastructure runs on the Canton Network, a privacy-preserving blockchain developed by Digital Asset and co-governed by DTCC and Euroclear through the Canton Foundation.
Key specifications:
The root wallet provision is the most consequential technical detail. It means DTC retains unilateral control over all tokenized assets in its system, regardless of who holds the private keys. This is architecturally antithetical to the decentralization ethos of public blockchains, but it preserves the regulatory control that SEC and FINRA require.
For institutions, this is the point: tokenization provides operational efficiency (faster settlement, 24/7 availability, programmable compliance) while maintaining the centralized oversight that regulators demand. The Canton Network is permissioned by design. It is not Ethereum. It is not meant to be.
The institutional tokenized fund market has entered a consolidation phase. On March 24 — the day before the hearing — Invesco ($2.2 trillion AUM) announced its acquisition of Superstate's $900 million USTB tokenized Treasury fund. The fund will be renamed the Invesco Short Duration US Government Securities Fund, with Superstate continuing to operate the on-chain technology infrastructure.
The competitive landscape:
| Fund | Issuer | AUM | Architecture | |---|---|---|---| | BUIDL | BlackRock / Securitize | ~$2.5 billion | Multi-chain (Ethereum, Solana, BNB Chain); tradable on Uniswap for whitelisted investors | | USTB → Invesco | Invesco / Superstate | $900 million | On-chain settlement with Superstate as technology provider | | BENJI | Franklin Templeton | ~$800 million | Tokenized share registry across seven networks; US-registered money market fund | | Ondo USDY | Ondo Finance | ~$600 million | Yield-bearing stablecoin backed by short-term Treasuries |
The pattern is consistent: traditional asset managers are acquiring or partnering with crypto-native technology providers rather than building in-house. BlackRock uses Securitize. Invesco acquired Superstate's infrastructure. Franklin Templeton built internally but tokenized only the registry layer.
This division of labor — legacy brand and distribution paired with crypto-native settlement technology — is becoming the default model. It also concentrates risk in a small number of technology providers. If Securitize has a critical failure, it affects the largest tokenized fund in the world.
SEC Chair Paul Atkins confirmed in late 2025 that "Project Crypto" would launch an Innovation Exemption in January 2026, creating a regulatory sandbox for tokenized products. The exemption allows eligible firms to issue tokens without full SEC registration, subject to constraints:
The sandbox has been operational since January 2026. Early participants have not been publicly disclosed, but the framework is designed to accommodate both TradFi firms testing tokenized products and crypto-native firms seeking to bring existing products into regulatory compliance.
The hearing on March 25 will likely address whether the sandbox model should be codified into permanent legislation or remain an administrative program subject to future SEC leadership changes.
The two bills under discussion take different but complementary approaches:
The Joint Study Bill (Modernizing Markets Through Tokenization Act) forces collaboration between the SEC and CFTC — agencies that have historically competed for crypto jurisdiction. The study requirement is a forcing function: it creates a deadline for regulatory clarity on tokenized derivatives, a market segment that has grown with minimal oversight. The bill does not create new rules. It requires the agencies to determine whether new rules are needed, and to do so together.
The Record-Keeping Bill (Capital Markets Technology Modernization Act) is more immediately actionable. Current securities regulations assume paper-based or centralized-database record-keeping. Broker-dealers using blockchain for trade records, transfer agents tokenizing share registries, and financial advisors accessing on-chain portfolios have operated in legal ambiguity. The bill clarifies that blockchain-based record-keeping satisfies existing SEC requirements, removing the need for individual exemptions or no-action letters.
Neither bill creates a comprehensive tokenization framework. Both are incremental. This is consistent with how U.S. securities law has evolved historically — through targeted amendments rather than wholesale rewrites.
The March 25 hearing arrives at a moment when the market has outpaced the law, but the law is closing the gap faster than at any prior point. The SEC approved Nasdaq's tokenized trading proposal in days, not months. The DTCC's no-action letter came with a three-year pilot window. Invesco acquired a $900 million tokenized fund the day before Congress examined the regulatory framework.
The two bills under discussion are modest by design. They do not create a tokenization regime. They create the conditions for one: forcing agency collaboration, legitimizing blockchain record-keeping, and building on the administrative sandbox already in operation.
The economic value question remains unresolved. Tokenization reduces settlement time and operational cost, but it also introduces new intermediaries (technology providers like Securitize and Superstate), new infrastructure dependencies (Canton Network, blockchain bridges), and new concentration risks. Whether the net result is a more efficient or merely a differently intermediated capital market will depend on how the settlement layer evolves — and who controls it.
The hearing will not answer that question. It will determine whether Congress grants itself the tools to ask it properly.