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BlackRock CEO, Larry Fink, recently noted his support for the Securities and Exchange Commission (SEC) approving "the tokenization of bonds and stocks." He hopes that this will "simplify things" and is confident it will "bring down the cost of ownership of stocks and bonds."

It's not clear to me how recording the ownership of these assets on a blockchain, instead of the existing databases, decreases the cost of ownership, but it does raise valuable questions about certain regulations.

If tokenized assets were given a regulatory harbor, then would venture capital firms be allowed to tokenize assets that are currently only available to accredited investors?

If they are, will they then be allowed to sell those assets to folks who aren't accredited investors?

I suspect that Fink hopes for a future where investors are no longer restricted from these assets by things like accredited investor laws.

Plus, if assets are tokenized, it enables you to do smart-contract-mediated lending of these assets. Borrowing against securities is often a highly regulated activity, but it would be convenient for certain firms if this were a less regulated activity.

I also imagine that many of these executives are excited about a future where those regulations don't apply to tokenized securities.

Or perhaps a distributed slow ledger has some other magical ability to lower costs while also making sure that existing laws surrounding investor protection are preserved, but I doubt it.