Dear SEC, Let Builders Build Bonds

Yesterday, we submitted a letter to the SEC’s Crypto Task Force alongside Brogan Law PLLC, laying out a case for a regulatory sandbox, one that would allow teams to issue, trade, and settle tokenized securities using blockchain infrastructure, all within a clear and lawful framework.

Our focus was on an often overlooked part of the market: access to foreign sovereign debt. While foreign exchange markets move trillions of dollars daily, US investors' ability to hold short-term government bonds from other countries, like Mexico’s CETES, which currently offer yields over 8%, is practically nonexistent. Most of these instruments never reach US markets, blocked by outdated registration requirements that force investors into ETFs with fees, delays, and limited utility.

Tokenization offers a clear path forward. It creates round-the-clock access, instant settlement, and on-chain transparency, making it far easier to hold and manage assets like sovereign debt. However, without clear legal routes to offer these bonds inside the US, builders face uncertainty, and meaningful innovation is pushed offshore.

The solution doesn’t require new legislation, the SEC already holds exemptive powers under the 1933 and 1934 Acts and the Investment Company Act of 1940. These tools could be used to create a new category, what we call Qualifying Foreign Government Securities, made up of investment-grade debt from sovereign issuers that meet global standards for disclosure and creditworthiness.

A sandbox built around this framework would give developers and issuers space to build responsibly, with real oversight and transparency. It would also reduce entry barriers for smaller issuers and allow testing models that modernize capital markets without weakening safeguards.

You can read the full letter here: https://t.co/3aJ1jJhhNp

Note: Our proposal is policy-only. We don’t promote any Etherfuse products or offerings. It’s a public submission to solve a structural gap that holds back market efficiency and excludes too many participants.