Chainlink comments on GENIUS Act and tokenization path in the US – addressing regulatory gaps, oracle roles, and secure on-chain asset frameworks. As one of the leading Web3 infrastructure providers offering the breakthrough CCIP protocol for cross-chain integration and tokenized assets, it highlights truly crucial factors for the sustainable development of digital finance.
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More on Chainlink’s Perspective on U.S. Regulation and Tokenization Challenges and Solutions
The Government Affairs team at Chainlink Labs shared its perspective, identifying three structural challenges preventing tokenization from moving from the experimental phase to infrastructure-grade adoption:
- Lack of consistent classification. They note that digital assets in the U.S. still lack a stable legal definition. Depending on the context, the same stablecoin may be treated as a payment instrument, a security, a banking product, or a fund. The same applies to tokenized Treasuries — while the underlying securities themselves are exempt from SEC registration, packaging them into a pooled product or adding yield can trigger the Investment Company Act. This makes the legal landscape fragmented and pushes market participants toward overly conservative product design or omission of key functionality.
- Lack of regulatory interoperability. Even though Chainlink CCIP is becoming more and more powerful in facilitating asset transfers across networks, there is no legal clarity on how regulatory obligations “travel” with the token. Custodial standards, licensing requirements, and investor protections often become ambiguous once the asset moves beyond its original environment. This undermines institutional confidence, fragments liquidity, and limits the practical use of cross-chain infrastructure.
- Limited end-user access. Regulated tokenized products are often limited to qualified investors via private offerings. They point to overly complex licensing regimes such as state-by-state MTLs, broker-dealer requirements, and trust charters. These barriers make it difficult for platforms to launch public offerings at scale, resulting in a two-tier system where institutional players gain access to new financial models while retail users are left out.
One of the key solutions identified by Chainlink is the GENIUS Act, though they argue that it may not be sufficient. They state that broader definitions are needed for other categories of tokenized assets such as Treasuries, funds, and RWAs. These assets should be defined not by rigid categories like “security” or “commodity,” but by their functions, risks, and structural attributes – a shift that could eliminate legal ambiguity and enable a more coherent long-term policy for tokenization.
They also argue that interoperability standards must go beyond just stablecoins, as envisioned in the GENIUS Act. In order to scale tokenization, comprehensive rules are needed to govern cross-chain transfers of all tokenized assets – with legal mechanisms ensuring the portability of compliance obligations, investor protections, and custodial roles betweensystems. These frameworks could emerge through pilot programs, coordinated regulatory actions, and joint rulemaking processes.
Finally, they highlight the need for access reform at the retail level. Only through streamlined licensing, public definitions of eligible tokenized products, and unified disclosure standards can tokenization offer equal access to all market segments.
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Conclusion
Chainlink raises critical issues that, while not directly criticizing the GENIUS Act, clearly point to its limitations. Regulators still have significant work ahead if they are to keep pace with the accelerating digitization and tokenization of financial assets, where both supply and demand continue to grow rapidly.
