Who oversees tokenized securities? The jurisdiction dispute between the SEC and CFTC introduces a new development at the congressional hearing

In March 2026, the U.S. House Financial Services Committee held a hearing on tokenization, dubbed by industry insiders as “the most important in history.” At this critical point where the total on-chain market value of RWA (Real-World Assets) surpassed $26.7 billion, this hearing was not an isolated policy discussion but the starting point for a systematic review by U.S. regulators of the tokenization of real-world assets.

The core issue of the hearing directly addressed the invisible barrier that has hindered large-scale institutional investment in recent years: regulatory uncertainty. When 66% of institutional investors cite “regulatory ambiguity” as the primary reason for avoiding digital assets, official congressional involvement signals that the compliance framework for RWA is shifting from “passive interpretation” to “active construction.”

What Structural Changes Have Occurred in RWA?

The fact that RWA’s total on-chain market value has reached $26.7 billion signals a fundamental structural shift. Compared to less than $100 million three years ago, RWA has moved from an early experimental phase driven by a few protocols to a scaled stage dominated by traditional financial assets such as U.S. Treasuries, private credit, and commodities. This change essentially reflects a paradigm shift in the crypto market—from purely on-chain native assets to the on-chain representation of off-chain value. As the on-chainization of traditional financial assets becomes an irreversible trend, regulators’ responses will inevitably shift from “case-by-case approval” to “systematic legislation.” The hearing is a formal response to this structural transformation.

The “Three Forks” in Regulation

One of the most central debates at the hearing revolved around jurisdiction over tokenized securities. The boundary of authority between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) has long been ambiguous in the crypto space. For tokenized assets that have both investment and payment functions, a single regulator often cannot cover all risks. The hearing did not provide a definitive division but sent two key signals: first, Congress favors joint rulemaking rather than simply classifying tokenized assets under existing frameworks; second, the “functional regulation” approach is beginning to replace “entity-based regulation,” meaning regulation will be based on the economic substance of the asset rather than its issuance form. This shift will directly influence future compliance costs and market entry barriers for RWA products.

The Structural Cost of Compliance

Enhanced regulatory clarity does not come without costs. From the information disclosed at the hearing, if tokenized securities are brought under traditional securities law, they will face a comprehensive set of compliance requirements, including registration, disclosure, custody, and investor suitability management. This means the current “light compliance, fast on-chain” model used by many RWA projects will become unsustainable. Rising compliance costs will accelerate market segmentation: projects with traditional financial backgrounds and ample compliance resources will gain institutional advantages, while early-stage projects focused on technological innovation will face pressure to transform. The core of this structural cost is the transition from “experimental phase” to “operational phase.”

Deep Reshaping of the Crypto Market Landscape

The regulatory direction indicated by the hearing is reshaping the underlying logic of the crypto market. In recent years, the value of RWA was primarily reflected on the asset side—namely, which traditional assets could be tokenized. Now, the establishment of regulatory frameworks is shifting the competitive focus toward infrastructure: those capable of building compliant technical protocols across multiple jurisdictions will become the foundational service providers for the RWA market. This transition will push the crypto industry from “asset-driven” to “infrastructure-driven,” with on-chain compliance layers, identity verification, and data disclosure layers being revalued. For exchanges and other market infrastructure providers, this means developing systems capable of handling compliant assets for trading and custody.

The 2030 $2 Trillion Blueprint: Three Possible Evolution Paths

Based on the policy signals from the hearing and the current market scale, three clear development paths for RWA are emerging. The first is the “Gradual Integration Path,” where regulatory frameworks become clearer over time, traditional financial institutions enter via pilot programs, and the RWA market reaches $1–2 trillion by around 2030. The second is the “Regulatory Divergence Path,” where the U.S., EU, and Asian jurisdictions develop differentiated regulatory regimes, resulting in a multi-center RWA market with a total size limited to under $500 billion. The third is the “Infrastructure-led Path,” where tokenization standards and compliance protocols become core industry barriers, with the market surpassing $2 trillion but most value concentrated in a few infrastructure protocols. The current regulatory inclination in the hearing aligns more with the first path, but the ultimate outcome will depend on subsequent legislative processes.

New Risks Brought by Regulatory Clarification

While increased regulatory clarity reduces uncertainty, it also introduces new risk structures. First, the unification of compliance requirements may eliminate “regulatory arbitrage,” risking the business models of projects that rely on low regulatory thresholds. Second, unclear custody responsibilities for tokenized assets could trigger liquidation chain risks during market volatility. Third, if regulatory frameworks overly favor traditional financial logic, they may suppress on-chain innovation, causing the RWA market to become a simple mirror of traditional assets rather than a new paradigm of value creation. These risks were mentioned during the hearing but lack mature mitigation mechanisms at this stage.

Conclusion

The $26.7 billion on-chain valuation is a significant backdrop for the U.S. House hearing on tokenization, but it is far from its full significance. This hearing marks the transition of RWA from an “industry narrative” to a phase of “institutional building.” Regulatory clarity is no longer an abstract slogan but has been concretized into jurisdictional delineation, compliance costs, and infrastructure standards—an operable set of institutional designs. Over the next three years, the core competition in the RWA market will shift from technological breakthroughs to compliance capabilities and institutional adaptability. For market participants, understanding the regulatory logic implied by the hearing will be more valuable in the long term than simply tracking market cap growth.

FAQ

Q: Did this hearing result in a clear regulatory law for tokenization?

A: No. This hearing is part of the policy discussion phase before legislation and did not pass any specific law. Its core significance lies in clarifying Congress’s institutional focus on RWA regulation and laying the groundwork for subsequent legislation.

Q: What is the source of the $26.7 billion on-chain market value for RWA?

A: This figure is based on market statistics of the total value of assets across multiple RWA protocols as of March 2026, including tokenized U.S. Treasuries, private credit, commodities, and other major categories.

Q: How will the jurisdiction over tokenized securities between the SEC and CFTC ultimately be divided?

A: It remains unresolved. The signals from the hearing favor a “functional regulation” approach—regulating based on the economic function of the asset rather than its issuance form. Future resolution may involve joint rulemaking.

Q: How much will compliance costs for RWA projects increase after regulatory clarification?

A: The specific increase depends on the final regulatory framework. If tokenized securities are incorporated into existing securities laws, compliance costs could rise by 30% to 50%, mainly affecting legal, auditing, and custody processes.