House Financial Services Committee Weighs Tokenization Rules and Regulatory Gaps

The House Financial Services Committee held a hearing on real-world asset tokenization in late March and is now weighing whether the issue requires new legislation or can be addressed through existing regulatory channels, Chairman French Hill said in an interview. 

Hill, who spoke at the Digital Assets and Emerging Tech Policy Summit hosted by Vanderbilt University and the Blockchain Association in early April, said the committee is assessing what additional authorities the Securities and Exchange Commission and bank regulators might need to facilitate tokenization.

House Committee Held Tokenization Hearing to Assess Whether New Legislation Is Needed

The March hearing was designed to help lawmakers evaluate what additional authorities or rules the SEC and bank regulators might need to facilitate tokenization of real-world assets, Hill said. He indicated the committee has not yet determined whether the issue demands a legislative response, stating: 

“Tokenization of an asset, such as a common stock, is really an exercise in changing systems. It’s not changing the law. All the legal or regulatory requirements about common stock are also applied to a common stock token, right? And so in our view, that’s why these hearings bring up member awareness.” 

Hill added that Congress, in its oversight role over regulatory agencies, can use hearings to explore how existing systems can be adapted to blockchain-based infrastructure. “We’ll find out if there needs to be some legislative activity versus purely regulatory activity, and that’s good. That’s what Congress’s job is,” he said.

Hill Cited Interoperability as the Central Challenge for Tokenized Markets

Hill drew a comparison between the potential shift to tokenized markets and earlier technological transitions in financial infrastructure, citing the move from T+5 settlement on equities to T+1. 

“We went from T+5 on equities in the 1970s to T+1. So to me, this is an operating decision, and the interoperability of it is the biggest challenge, not the mechanical, technical aspect of doing it.” 

Hill also said his committee is exploring the possible tokenization of deposits in the commercial banking sector, which could enable direct debit payments without requiring an intermediary. Hill said the committee has not committed to pursuing tokenized deposit legislation but has identified it as a potential area of focus.

Hill Said Senate Borrowed Heavily From House Work on the Clarity Act

Hill also addressed the status of the Clarity Act, the market structure legislation that has since advanced out of the Senate Banking Committee with a 15-to-9 bipartisan vote on May 14. He said Senate negotiators had drawn substantially on the House’s legislative work. 

“I think the Senate’s relied quite a bit on the House work on both FIT21 from the previous Congress and Clarity in this Congress,” he said in April. 

Hill added that he and Rep. Bryan Steil, who chairs the House Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, have remained in contact with senators working on the bill. Senate negotiators have kept their House counterparts “apprised of the process,” he said.

Hill Expects Joint CFTC-SEC Rulemaking to Follow If Clarity Act Passes

Hill said that if both the GENIUS Act and the Clarity Act pass, he expects a roughly 12-month joint rulemaking process between the Commodity Futures Trading Commission and the SEC to follow. 

“I really think policy attention will track back into the regulatory agencies to try to make sure that our vision in the House of an integrated, common, fit-for-purpose approach is absolutely implemented,” he said. Hill also said the digital assets industry’s political engagement would continue into the 2026 congressional elections, describing its participation as bipartisan.