Blockchain-Based Securities: Navigating Regulatory Labyrinths and Market Readiness for ...

This article examines the transition of traditional securities to blockchain-based systems, analyzing the regulatory, technological, and market challenges facing this emerging sector.

The article explores how blockchain-based securities are moving from theory to reality, with the global blockchain market reaching $31.28 billion by 2025. However, regulatory fragmentation across federal and state levels creates compliance uncertainties, while technological hurdles like scalability issues on networks such as Ethereum continue to hinder widespread adoption. Smart contract vulnerabilities and investor skepticism about tokenized assets further complicate market readiness.

• The U.S. regulatory framework remains fragmented, with federal agencies like the SEC providing some clarity while state regulators push back against standardized definitions
• Technological barriers persist, including network congestion, high transaction fees, and interoperability challenges between blockchain systems and legacy infrastructure
• Institutional investor adoption faces obstacles due to smart contract risks, governance concerns, and the speculative nature of tokenized assets
• Investment opportunities exist in blockchain infrastructure companies, compliance solution providers, and hybrid systems that combine traditional and digital finance approaches