SEC Proposes Overhaul to Allow Blockchain Ledgers as Official Records of Securities Ownership

The U.S. Securities and Exchange Commission (SEC) last week unveiled a proposed rule that would modernize decades-old transfer agent regulations and, for the first time, explicitly recognize electronic recordkeeping systems—including blockchain ledgers—as official records of securities ownership. If adopted, a blockchain could serve as the "primary securities record," potentially eliminating today’s common setup for tokenized securities that relies on two parallel systems: an onchain token ledger alongside the legally authoritative shareholder register kept offchain. The SEC’s approach could allow issuers and transfer agents to stop maintaining duplicate books and avoid post-transfer reconciliation, reducing operational complexity and limiting the risk of mismatches between onchain data and legally recognized records. Eli Cohen, chief legal officer at tokenized fund platform Centrifuge, said the proposal could compress the current "two-step" workflow into a "one-step" process by making the blockchain itself the primary record. Market participants cautioned the change would not make tokenized securities fully "permissionless." Joris Delanoue, CEO of Fairmint—an SEC-registered onchain transfer agent—said public blockchains can remain open, but the assets must still adhere to ownership and transfer requirements. Controls such as identity verification and transfer restrictions would remain embedded in the tokens. Transfer agents would also continue handling administrative events like shareholder deaths, inheritance processing and legal notices, though processing times could shrink from 3–5 days to about 1 day. The proposal is subject to a 60-day public comment period that runs through early November.