Tokenization and stablecoins may weather Democratic sweep, experts say

Tokenized stocks and stablecoin payments may continue under current laws

Plans to move stocks, bonds and funds onto blockchain rails may continue after Democrats' midterm gains, according to industry experts who spoke to CoinDesk on Nov. 4.

Tokenization means turning real-world assets such as securities into digital tokens on a blockchain, which is a shared digital record system. Stablecoins are digital tokens designed to keep a stable value, in this case for payments.

Experts said tokenized securities and stablecoins have a stronger basis in existing laws. Broader crypto rules from regulators face more questions about pace, oversight and how long they will last.

Key points from the experts

• Tokenized securities can proceed under existing laws, experts said.
• The GENIUS Act created a federal framework for payment stablecoins in 2025.
• The SEC and CFTC can keep writing crypto rules, but lawyers disagreed on whether progress will slow.
• The failed Clarity Act faces a tougher path, and broader market rules remain unresolved.

Why tokenization and stablecoins may be more resilient

Peter Curley, head of global regulatory affairs at Ondo Finance, said the SEC and CFTC may face more questions from Congress. He said he still sees little reason for tokenized securities to stop, because agencies have already made progress without new legislation and established frameworks exist for tokenized securities and derivatives markets.

Aaron Kaplan, CEO of Prometheum, said business can also continue. He said broker-dealers are exploring crypto offerings for brokerage accounts, securities issuers are developing tokenization plans, and international trading venues are looking at the Depository Trust & Clearing Corp.'s tokenization service as a way to offer tokenized U.S. equities abroad.

Stablecoins have a separate legal base. The GENIUS Act passed with bipartisan support in 2025 and set federal rules for payment stablecoins, including backing by liquid reserves and federal or state oversight.

Abhishek Vaidyanathan, chief legal officer of the NEAR Foundation, said GENIUS takes effect on Jan. 18, fifteen days after the new Congress is seated. He said issuers therefore have a statute to work from, while the rest of the market continues under existing law, interpretations and proposed rules.

Agency rules face questions about pace and durability

Regulators have spent much of 2026 writing rules without comprehensive legislation from Congress. The SEC has proposed changes involving blockchain technology in transfer-agent rules, an exemption for venues trading tokenized securities, and Regulation Crypto Assets, which would ease certain requirements for crypto offerings.

The CFTC has also moved ahead on perpetual futures. These are crypto-style derivatives that let traders bet on prices without an expiration date.

Lawyers gave different views on the election's effect. Elizabeth Lan Davis of Davis Wright Tremaine said she expects rulemaking to slow significantly, especially if Democratic commissioners are appointed. Kris Swiatek of Seward & Kissel said he does not expect the midterms to materially slow the digital asset agenda at the SEC or CFTC.

Swiatek said Democratic control will likely bring more scrutiny of agency authority and rulemaking, but regulators can still work under existing law.

Both lawyers raised a longer-term issue. Guidance can be withdrawn by a future administration, while formal regulations take longer to reverse. Changes in commission membership could also make it harder to finish rules before President Donald Trump's term ends.

Comprehensive crypto legislation faces a tougher road

Democratic control of Congress makes comprehensive crypto legislation less likely after the Clarity Act failed to advance, Vaidyanathan said.

A future bill could keep the basic split in oversight between the SEC and CFTC, he said. It could also add tougher provisions on illicit finance and conflicts of interest involving elected officials.

Decentralized finance, or DeFi, could bring the sharpest disagreements. Democratic proposals have sought broader oversight of people who design, control or profit from apps that let users access decentralized protocols, Vaidyanathan said. That raises questions about protections for software developers.

Sources

• CoinDesk