Solana Policy Institute, Orca, and Superstate propose SEC-backed framework to bring Wall Street stocks to the blockchain

The Solana Policy Institute, alongside other groups, put forward a new framework that would put equity securities on the blockchain and say it could innovate financial markets. 

The pilot project, dubbed Project Open, would put stocks on blockchains such as on Solana. That would benefit the U.S. financial market through increased transparency, instant settlements, and reduced costs, the institute said.

“Project Open is an embodiment of American progress in financial innovation,” said the institute’s CEO, Miller Whitehouse-Levine, in a statement on Wednesday.  “Our goal is to work constructively with the SEC and industry partners to create internet capital markets, and make all capital markets more efficient, accessible, and transparent.”

The newly created advocacy group Solana Policy Institute, financial infrastructure firm Superstate Inc., Lowenstein Sandler LLP, and Orca Creative submitted their proposal to the U.S. Securities and Exchange Commission’s Crypto Task Force on Wednesday. Orca is a decentralized automated market maker built on Solana. 

Traditional stock markets and crypto markets have some notable variations, such as differences in hours of operation — crypto trades 24/7 while the stock market has set hours on weekdays from 9:30 a.m. to 4:30 p.m. ET. Tokenizing assets has been a part of the discussion among those in the financial industry. More recently, in a letter to investors last month, BlackRock CEO Larry Fink said that “every stock, every bond, every fund-every asset- can be tokenized.” 

“If they are, it will revolutionize investing,” Fink said in the letter. “Markets wouldn’t need to close. Transactions that currently take days would clear in seconds. And billions of dollars currently immobilized by settlement delays could be reinvested immediately back into the economy, generating more growth.” 

Under Project Open, issuers would issue “their token shares” through a registration statement and would be subject to reporting requirements, according to the group’s filing. The filing also proposed relief for blockchain not to be subject to any SEC registration. 

Dozens of stakeholders have filed written input to the agency’s Crypto Task Force over the last few months. On Wednesday, the Proof of Stake Alliance filed a letter asserting that staking and staking services are not securities. 

The task force has held three crypto roundtables focused on topics from trading to custody. The SEC has already shown a significantly different approach to regulating crypto compared to the one used under the Biden Administration, when Gary Gensler was chair. Gensler has said most cryptocurrencies were securities and brought charges against large crypto firms for not registering with the agency. 

Since Gensler’s exit in January, the SEC has rescinded controversial crypto accounting guidance and dropped enforcement actions against major crypto industry players. The agency also has a new chair, Paul Atkins, who said last week that he anticipates “huge benefits” from digital assets and said he plans to work with lawmakers to create a regulatory framework for crypto.

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