SEC Proposes Blockchain-Ledger Usage in Official Securities Ownership Records

The US Securities and Exchange Commission (SEC) has proposed a new framework for blockchain-ledger usage in official securities ownership records. The proposal would update decades-old transfer agent rules to recognize electronic databases, including distributed ledgers, as systems that can hold the official record of securities ownership.

Under current tokenization models, an on-chain token does not serve as the final legal record of ownership. Transfer agents and issuers maintain a separate shareholder register outside the blockchain, while the digital token tracks transfers on-chain.

The proposed change would reduce the existing 'two-step' model to a 'one-step' process, according to Eli Cohen, chief legal officer at Centrifuge. The blockchain itself could serve as the master securityholder file once the rules permit it.