SEC Proposal Would Make Blockchain the Official Ledger for Ethereum (ETH) Tokenized Stocks

Blockchain as Master Security File

The U.S. Securities and Exchange Commission has put forward a rule proposal that would, for the first time, explicitly allow electronic databases — including blockchain ledgers — to serve as the official record of securities ownership. The package would overhaul transfer-agent rules that have governed U.S. markets for roughly five decades, a framework written long before blockchain-based securities entered the capital markets. The problem it targets is well understood by anyone issuing tokenized stocks today: an onchain ledger can show precisely who holds a token, yet the legally recognized shareholder record usually sits in a separate offchain register. When the two diverge, lawyers default to the offchain version even where the onchain data is fresher, forcing issuers and transfer agents to reconcile two ownership databases after nearly every transfer. That duplication is more than an operational drag; Centrifuge chief legal officer Eli Cohen has pointed out that an insolvency or bankruptcy involving mismatched records would leave behind “a mess.” If adopted, a qualifying blockchain could become the so-called “master securityholder file,” moving the technology from a system layered on top of market infrastructure to part of the legally recognized infrastructure itself. Joris Delanoue, CEO of SEC-registered onchain transfer agent Fairmint, framed it plainly: the master file was once paper in a filing cabinet, then a database — and the proposal recognizes that a blockchain can be that database, not merely a copy of it. Cohen added that the prevailing “two-step” model could collapse into a one-step process, with the chain itself acting as the controlling record. The full text is published in the SEC’s official press release, and a 60-day public comment period is open, with submissions due in early November.

Compliance Duties Stay Intact

Regulated does not mean permissionless. Under the proposal, a public blockchain could hold the ownership record while identity verification, investor eligibility checks and transfer restrictions remain embedded in the token itself. Smart contracts could block a transfer before it ever reaches the ledger if a wallet has not completed required checks or the recipient is barred from holding the asset — a structure that separates issuer-backed tokenized securities, the model pursued by platforms such as Ondo Finance (ONDO), from freely movable crypto assets and from trading infrastructure built on 0x Protocol. Ethereum (ETH), the settlement layer for most issuer-backed tokenization pilots, is the network whose recordkeeping role this rulemaking would most directly legitimize. Transfer agents would not be automated out of the picture: they must still process shareholder deaths, inheritance, legal notices, ownership restrictions and record corrections, much of which remains stubbornly physical. Incoming mail, for instance, must be received, opened, identified and acted on under prescribed procedures; Delanoue noted the current processing window of three to five days could fall to roughly one day. His warning to new entrants was blunt — there is “no more free lunch,” and maintaining the official record means operating the full transfer-agent function, which is why some firms may outsource parts of the work to established providers rather than build it in-house. The proposal also draws a line under lookalike products: stock tokens that offer price exposure without a register entry — the structure behind the standoff between Robinhood and AMC, where Vlad Tenev rejected Adam Aron’s demand to halt offshore tokens — sit outside this recordkeeping framework. Privacy-preserving compliance tools such as zero-knowledge proofs could further let agents verify eligibility without exposing holder data, while record integrity would still rest on the chain’s validators and the controls wrapped around them. Readers tracking the market in real time can follow live spot and futures prices on Binance.

What the Filing Actually Requires

COINOTAG’s reading of the filing itself: this is a proposal, not a final rule. The document opens a 60-day comment window closing in early November, after which the Commission may revise the text before any vote on adoption. It binds SEC-registered transfer agents, who remain subject to existing requirements on registration, record accuracy, asset protection and regulatory reporting regardless of the ledger they use. Whether a blockchain can ultimately serve as the official record depends on the final rule’s standards for record integrity, cybersecurity and access controls. If finalized in its current shape, Ethereum (ETH) — the settlement layer for most tokenized-equity pilots — gains its clearest U.S. legal footing yet, not as a shadow copy of ownership but as the record itself.