T. Rowe Price's Head Of Digital Assets Says Tokenized Stocks Must Be 'Instantly Fungible,' Agency Rules Can Move Without CLARITY Act

• T. Rowe Price's Blue Macellari said on Thursday that tokenized shares must be "instantly fungible" with legacy ones.
• On-chain and legacy liquidity pools stay separate, risking "unintended delays and consequences," she said.
• Coinbase CEO Brian Armstrong said clarity was coming "either way" after the Senate vote failed.

T. Rowe Price (TROW) head of digital assets Blue Macellari said tokenized stocks won't deliver real efficiency until shares move instantly between on-chain and legacy formats, and that the industry would get clear rules even without the Digital Asset Market Clarity Act (CLARITY Act) passing.

Speaking on the Coinage podcast on Thursday, Macellari said the piece that would "really kind of change everything" was still missing. A tokenized share today sat in an on-chain liquidity pool separate from "the old-timey legacy liquidity pool." The two connected only through a multi-step function, and according to her, the “transmission mechanism can have unintended delays and consequences."

Tokenized Stocks Need Seamless Liquidity Across Formats

She used a single stock to make the point. "If I am going to get my Tesla (TSLA) shares, I can get them in tokenized format or paper alternative format, legacy format, and they are interchangeable. And I don't need to care," Macellari said. Without that, she added, "I'm limiting my pool of liquidity if I get a token format."

The blocker was rather regulatory, according to the T.Rowe executive. The open questions were who had authority to issue a tokenized share, who could move it back and forth, and whether it counted as a native issuance or "effectively a derivative."

T.Rowe is an asset manager, with over $1.89 trillion in assets under management (AUM). TROW stock closed up over 1% on Friday. On Stocktwits, the retail sentiment around TROW remained in the ‘bullish’ zone, while chatter around it stayed at ‘high’ levels over the past day.

Approvals Are Already Landing

Macellari said what surprised her was the speed at which exchanges and clearinghouses are attacking tokenization, naming Depository Trust & Clearing Corporation (DTCC), Intercontinental Exchange (ICE) and Nasdaq (NDAQ) as firms "trying to crack the tokenization nut in different ways."

Those approvals have been stacking up. The SEC approved Nasdaq's proposal to enable tokenized securities trading in March, and DTCC moved tokenized securities into live trading in July. The SEC opened the door further on Thursday with a new "Innovation Exemption," letting venues trade tokenized U.S. stocks on blockchain for five years without registering as exchanges.

Macellari's caution was that the underlying market could not be disturbed while that happened. U.S. equities were "the juggernaut of the world economy," she said, and "you cannot be like, we're experimenting over here, and we accidentally unplug something." Her prescription was to "build in parallel."

CLARITY Act Or Not

When asked whether a failed bill could stall the entire industry, Macellari replied that it wouldn’t. "Regulators at the agency level are willing and able to step in. We can have agency-led rulemaking in the absence of [legislation]," she said, calling legislative rulemaking "shockingly slow" by comparison. She said firms would get "the tools that we need to basically build in the coming months" either way.

The Senate's cloture vote on the CLARITY Act failed 49-50 on Tuesday.

Armstrong Made Similar Point

Coinbase (COIN) CEO Brian Armstrong also made a similar argument on the day the vote failed. Speaking on the Money Rehab podcast, he said "regulatory clarity is coming for crypto either way," and that regulators "have made clear that they're willing to move forward under their existing authority to publish clear rules for crypto."

Armstrong said the Senate "might revisit it here in a week or two," with negotiation still underway and another vote possible.

COIN stock closed in the green, up over 11% on Friday. On Stocktwits, the retail sentiment around COIN moved to the ‘neutral’ from the ‘bearish’ zone, while chatter around it stayed at ‘high’ levels over the past day.

Read also: This Bitcoin Signal Has Flashed Just 4 Times In History, And The Prior 3 Coincided With Bear-Market Bottoms — Here’s What To Know

For updates and corrections, email newsroom[at]stocktwits[dot]com.