The call for tokenization continues to grow, but the enthusiasm is primarily focused on the opportunities for big cryptocurrencies, big banks, and Wall Street.
What about small businesses?
small scale cryptocurrency
Last week, these institutions participated in policy dialogue at the U.S. House of Representatives Financial Services Committee’s tokenization hearing. A Democratic witness, Salman Banaei, general counsel for Plume Network, made a compelling case for the value proposition of tokenization in his testimony.
“Plume is Ethereum’s ‘compliance layer’ and is the only Ethereum Layer 2 blockchain built to support AML tokenization and protocol-level sanctions control. Our Nest asset management protocol also embeds compliance directly into tokenized assets,” he said.
Mr. Banaei advocated for the secure integration of tokenization into capital markets and advocated for community-focused asset-backed securities.
“Congress should encourage the SEC to promote the tokenization of asset-backed securities (ABS), securities backed by community development financial institutions, minority business institutions, minority depository institutions, low-income housing tax credit programs, and opportunity zones, including federally supported programs that enhance capital formation in underserved communities.”
He also expressed concern about how regulatory fragmentation could affect America’s global competitiveness in emerging sectors.
“Foreign jurisdictions are not waiting for the SEC or Congress to act. The infrastructure layer of the global capital markets is being built now.”
U.S. Rep. Maxine Waters and Plume Network General Counsel Salman Banaei.
Salman Banaei, General Counsel, Plume Network
A clear market structure that promotes competitiveness
A few days ago, I served as a panelist for a global tokenization session hosted by the Institute of International Law. Fellow speaker Anne-Sophie Sissy, Kaiko Chief Management Officer and Group General Counsel, focused on market structure. She discussed the missing infrastructure layers and compliance challenges that will make or break cross-border tokenization.
“Cryptocurrency and DeFi have proven that smart contracts and blockchain work to enable financial services. Data infrastructure is an essential layer, needed to bridge traditional market data pipelines and on-chain contract execution,” she emphasized.
In his call to action, Sisi encouraged the formation of industry working groups, public-private partnerships, and common standards for proof of reserve.
These types of recommendations can create potential opportunities for small businesses and organizations. But what is the way forward?
ILI Financial Roundtable “Tokenization – Current Status, Regulatory Challenges and Future Directions” (March 19, 2026)
Institute of International Law
movement towards harmony
There is a lot of policy and regulatory work to do to foster transparency and a strong tokenization sector with participation for traditional small and medium-sized enterprises and microenterprises such as minority financial institutions and community development financial institutions.
The frontier of the future is just beginning, but if the United States is to take the lead in the global tokenization market, Washington must move faster. The US Senate’s market structure bill has a tokenization provision, but it has stalled. But guidance is trickling down and talk of harmonization among regulators is encouraging.
A few weeks ago, the Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued a joint statement outlining guidance regarding the capital treatment of eligible tokenized securities.
Still, the United States needs to develop a comprehensive framework to ensure that smaller players are not sidelined in the tokenization boom.
