Project Crypto: Paul Atkins Unveils SEC’s Digital Asset Reforms

Project Crypto Under Paul Atkins Aims to Modernize US Crypto Policies

SEC Chairman Paul S. Atkins has unveiled a big new initiative, Project Crypto, designed to revolutionize how the U.S. approaches digital asset regulation.

In an interview with Yahoo Finance on July 31, this step represents a massive change of direction for the SEC making America a friendlier destination for blockchain developers and crypto entrepreneurs.

Source: X (formerly Twitter) 

Supported by increasing political backing, including the President Trump administration. The Project Crypto is designed to eliminate confusion over cryptocurrency legislation. 

It makes registration easier, and enhances innovation in areas such as tokenization and DeFi.

The project will enable the SEC to "update outdated rules," and provide clearer direction on trading, custody, and compliance, said Paul Atkins.

Regulatory Clarity for a Digital Future

For years, cryptocurrency companies struggled to register with the SEC, frequently finding themselves up against outdated laws that did not apply to digital assets.

Atkins said that most rules were "designed for the industrial age," making it virtually impossible for Web3 and blockchain firms to do business legally in the U.S.

Project Crypto wants to reverse that by establishing new rules that are simpler to comprehend and implement.

This involves more precise definitions of digital assets to differentiate between what is a commodity and what is a security.

With Bitcoin and Ethereum being identified as commodities, oversight will be in large part the duty of the CFTC. It will unencumber cryptocurrency builders from the SEC's formerly ambiguous attitude.

Support for Innovation and Tokenization

One of the main areas Project Crypto is working on is tokenization, or the act of converting real-world assets such as stocks or property into cryptocurrency tokens.

• The SEC is currently developing a legal framework for this transition, affirming that although tokenized shares will remain securities. 

• The new regulations will enable their issuance and exchange on the blockchain. 

• Atkins illustrated that blockchain brings advantages such as transparency and efficiency.

• He feels such features are able to enhance the existing financial system, particularly when paired with simple regulations.

• The scheme also brings in exemptions for innovation and a "regulatory sandbox," where startups are able to experiment without fear of being enforced instantly.

Custody Reforms and Faster Registration

Reforms in custody of how the digital assets are held will also be reformed. The SEC is working together with bank regulators to bring rules into alignment on a broad basis.

Atkins explains that the agency can use the rule of interpreting existing legislation in a form that is suited for the digital era. The aim is to have rules that safeguard investors but continue to permit expansion. 

Although some of the changes will be gradual owing to public rule proposals and comment periods, Atkins assured that proposals will begin to roll out this year. The schedule can carry over into 2026, but work is already underway. 

U.S. to Be Global Crypto Hub

With Project Crypto, the SEC is sending a message: America wants to be at the forefront of digital finance. From facilitating legal ICOs and airdrops to backing DeFi protocols and token platforms. This proposal touches all the central aspects of the blockchain universe.

Atkins labeled this an "inflection point," akin to the establishment of the NYSE under the Buttonwood Agreement. Just like those early financial markets revolutionized the economy, Project Crypto aims to open a new era of blockchain regulation.

If it succeeds, The project could turn around the trend of U.S. developers going offshore and bring digital currency innovation back to America.