In a watershed moment for the digital asset industry, Securities and Exchange Commission (SEC) Chairman Paul Atkins has officially unveiled 'Project Crypto,' a comprehensive regulatory initiative designed to modernize the U.S. financial system. Announced during joint remarks with CFTC Chairman Michael Selig at ETHDenver on February 18, 2026, the program marks a decisive pivot from the agency's previous enforcement-heavy stance toward a pro-innovation framework. Central to this initiative is the introduction of 'Innovation Exemptions,' a regulatory sandbox that allows financial institutions and crypto-native firms to pilot tokenized securities and Real-World Assets (RWA) under supervised conditions.
'Project Crypto' and the Innovation Exemption
At the core of Chairman Atkins' strategy is the "Innovation Exemption," a three-year pilot program explicitly designed to bridge the gap between traditional finance (TradFi) and decentralized infrastructure. For the first time, the SEC is establishing a formal crypto regulatory sandbox where qualified platforms can trade tokenized equities and debt instruments using automated market makers (AMMs) without triggering immediate enforcement actions. "The goal is to make the U.S. a welcoming environment for digital asset entrepreneurs again," Atkins stated, emphasizing that market participants should be able to engage with decentralized applications on public, permissionless blockchains.
This exemption comes with specific guardrails, including volume caps and enhanced disclosure requirements, ensuring investor protection while fostering technological experimentation. By allowing direct security-to-crypto trading pairs, the initiative removes the friction of mandatory fiat intermediaries, a move expected to significantly boost liquidity in tokenized securities 2026 markets.
New Operational Standards: Stablecoins and ATS
Beyond the sandbox, 'Project Crypto' introduces immediate operational changes that have sent positive ripples through the market. On February 20, 2026, the SEC's Division of Trading and Markets released updated guidance reducing the capital "haircut" for qualified payment stablecoins from 100% to just 2%. This critical adjustment allows broker-dealers to treat stablecoins like USDC similarly to money market funds, effectively integrating them into the regulated capital stack.
Additionally, the new framework unifies operational structures for Alternative Trading Systems (ATS). Under the new rules, an ATS can now combine brokerage, custody, and clearing functions within a single legal entity, provided they meet strict cybersecurity and legal standards. This consolidation creates a viable pathway for institutional crypto adoption, as it simplifies the complex and often fragmented infrastructure that previously deterred major Wall Street players.
Collaborative Oversight with the CFTC
A unique feature of 'Project Crypto' is its collaborative nature. Chairman Atkins and CFTC Chairman Michael Selig—who previously served as counsel to Commissioner Hester Peirce—have committed to a harmonized regulatory approach. This joint initiative aims to eliminate the jurisdictional tug-of-war that plagued the industry for years, offering a unified "compliance-first" roadmap that classifies assets based on their economic reality rather than rigid historical labels.
The Boom in Real-World Asset (RWA) Tokenization
The regulatory clarity provided by 'Project Crypto' is already fueling a surge in RWA tokenization news. With the legal ambiguity lifting, major financial institutions are accelerating plans to tokenize U.S. Treasuries, private credit, and real estate. Analysts predict that this US crypto policy shift could unlock trillions in illiquid assets, with Boston Consulting Group projecting the tokenized asset market to reach $10 trillion by 2030.
"We are witnessing the migration of securities positions from traditional databases to blockchain-based systems," noted SEC Commissioner Mark Uyeda. This transition is not merely technical but structural, promising to democratize access to high-value asset classes and enable 24/7 global trading.
Conclusion: A New Era for U.S. Crypto Markets
The launch of 'Project Crypto' represents the most significant US crypto policy shift in a decade. By moving from "regulation by enforcement" to a structured, transparent framework, the SEC under Paul Atkins is positioning the United States to reclaim its leadership in the global digital economy. As the Innovation Exemptions go live later this year, the industry stands on the precipice of a new era where compliance and innovation finally align to drive the next wave of financial evolution.
