The call for tokenization is growing louder, with much of the excitement focused on big players in the crypto, banking, and Wall Street sectors.
But what about small businesses?
Small-scale Tokenization
During a recent tokenization hearing at the U.S. House Financial Services Committee, small enterprises were also part of the conversation. Plume Network General Counsel Salman Banaei, representing the Democratic side, presented a compelling case for tokenization in his testimony.
“Plume acts as Ethereum’s ‘Compliance Layer,’ offering AML and sanctions controls at the protocol level. Our Nest asset management protocol integrates compliance directly into tokenized assets,” Banaei explained.
Banaei advocated for the safe inclusion of tokenization in capital markets and highlighted the potential for community-focused asset-backed securities.
“Congress should support the SEC in facilitating the tokenization of asset-backed securities linked to federally-backed programs that promote capital formation for underserved communities, such as securities backed by Community Development Financial Institutions, Minority Business Institutions, Minority Depository Institutions, Low-Income Housing Tax Credit programs, and Opportunity Zones,” he proposed.
He also expressed concerns about how regulatory discrepancies could affect U.S. competitiveness in the global sector.
“Foreign jurisdictions are not waiting for the SEC or Congress to make decisions. The groundwork for global capital markets is being laid now,” Banaei warned.
U.S. Rep Maxine Waters with Salman Banaei, General Counsel of Plume Network.
Salman Banaei, General Counsel, Plume Network
Creating a Transparent Market Structure to Boost Competitiveness
Recently, I participated in a global tokenization webinar hosted by the International Law Institute. Anne-Sophie Cissey, Chief Administrative Officer and Group General Counsel for Kaiko, emphasized the importance of market structure. She discussed the crucial infrastructure layer and the compliance challenges that can impact cross-border tokenization.
“Crypto, particularly DeFi, has demonstrated the effectiveness of smart contracts and blockchains in enabling financial services. Data infrastructure is a critical layer that bridges traditional market data pipelines with on-chain contract execution,” she highlighted.
Cissey called for the establishment of industry working groups, public-private partnerships, and shared standards for proof-of-reserves to unlock opportunities for small businesses and institutions. But how can we move forward?
ILI Finance Roundtable Panel, “Tokenization – Current State of Play, Regulatory Challenges and Future Directions” (March 19, 2026)
International Law Institute
Progress Towards Standardization
There is significant policy and regulatory work required to bring clarity and drive a thriving tokenization sector that offers opportunities for traditional small businesses and micro entities, such as Minority Depository Institutions and Community Development Financial Institutions.
While it is still early days in this new frontier, for the U.S. to lead in the global tokenization market, action from Washington is essential. Although market structure legislation in the U.S. Senate includes a section on tokenization, progress has stalled. Nonetheless, there are signs of guidance emerging and discussions on harmonization among regulatory bodies are promising.
Recently, the Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency issued a joint statement outlining guidelines on the capital treatment of eligible tokenized securities.
However, a comprehensive framework is needed in the U.S. to ensure that small players are not left behind as tokenization gains momentum.
