TLDR
The SEC has formally greenlit regulated tokenized funds and is preparing to do the same for tokenized bank deposits, moving blockchain deeper into the core of the US financial system.
- The SEC granted exemptive relief for WisdomTrees tokenized Treasury money market fund, allowing 24/7 trading and instant settlement under existing securities rules.
- US regulators now describe tokenized deposits as the next step, turning bank account balances into onchain instruments that can move like stablecoins but sit inside the banking perimeter.
- This shifts the tokenization and stablecoin narrative, with big implications for where yield, payments volume, and DeFi integrations may migrate over the next few years.
Deep Dive
1. What The SEC Approved
In February 2025 the SEC approved WisdomTrees Treasury Money Market Digital Fund, a regulated money market fund whose shares exist as blockchain tokens and are designed to trade at a fixed 1 dollar price throughout the day. The fund holds short term US Treasuries, but ownership is represented by tokens rather than traditional share entries, enabling near instant settlement and continuous intraday trading under a dealer model instead of once per day NAV pricing.
Subsequent exemptive relief and FINRA sign off allow WisdomTree to offer 24/7 trading and instant settlement in this tokenized mutual fund, treating it as a form of digital cash backed by Treasuries with onchain record keeping and yield accrual. This is a concrete example of a fully regulated tokenized fund operating under the Investment Company Act framework, not a lightly regulated crypto product.
2. How Tokenized Deposits Fit In
SEC Chair Paul Atkins has pointed to tokenized deposits as the next instrument in this policy shift, alongside tokenized funds, as part of a broader Project Crypto agenda to modernize securities rules. In this model, a tokenized deposit is a digital claim on a commercial bank deposit, issued on a blockchain but still sitting on a banks balance sheet and inside normal prudential regulation.
Unlike stablecoins, which are typically issued by non bank entities against segregated reserves, tokenized deposits would be native bank liabilities that can move 24/7, integrate with smart contracts, and settle instantly while relying on existing deposit insurance and bank supervision. That makes them attractive to regulators who want programmable money without creating a parallel shadow banking layer.
3. Why It Matters For Crypto Users
For crypto markets, this is a strong validation of the real world asset and tokenization thesis. The SEC is not just tolerating tokenization, it is approving structures that let Treasuries and cash like instruments live onchain inside the most conservative parts of finance.
Over time, tokenized funds and deposits could compete directly with stablecoins for onchain cash and yield, especially on networks favored by institutions such as Ethereum and other major smart contract chains. They also open the door for more compliant DeFi style integrations where regulated funds and bank money interact with protocols via permissioned rails.
the center of gravity for onchain dollars and yield could gradually shift toward regulated tokenized funds and bank deposits, so it is worth watching which chains, protocols, and venues these institutions actually choose to use.
Conclusion
The SECs approval of tokenized funds and its push toward tokenized deposits marks a clear turn from enforcement first to integration first for onchain finance in the US. If this trajectory continues, the biggest winners are likely to be the networks and applications that can safely host regulated cash and securities, even as stablecoins and traditional DeFi remain important parts of the ecosystem.
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