- The US Securities and Exchange Commission (SEC) has recognised Canton Coin, the native token of Canton Network, as a digital commodity under its latest interpretation of crypto regulations.
- SEC staff said they would not recommend enforcement action against validators and application providers for issuing the token programmatically without registration.
- The development comes as major financial institutions, including Morgan Stanley, explore tokenization services using the Canton Network.
SEC Provides Regulatory Clarity For Canton Coin
The native token to the Canton Network, Canton Coin, has received a major boost in terms of regulatory clarity from the U.S. Securities and Exchange Commission (SEC). In a letter dated Tuesday, the SEC’s Division of Corporation Finance said that the asset should be classed as a digital commodity.
Source: sec.gov
Furthermore, SEC staff said they will not recommend any enforcement actions against the token if it is programmatically distributed by validators and application providers on the network. The move comes as many big financial institutions continue to look at blockchain-based tokenization options.
The SEC made their decision based on the information provided by legal representatives of the Canton Network. They said that the value of the token does not come from the efforts of a controlling organisation but instead from the activities of the network and demand in the market.
Furthermore, there is no controlling entity within the network. When the token was launched there was no initial coin offering or premine. Users could only earn the tokens by operating infrastructure and applications on the network.
Growing Interest From Wall Street
The move comes just days after the Depository Trust and Clearing Corporation launched a new tokenization service powered by the Canton Network and its private network. The service allows financial institutions to tokenize stocks and U.S. Treasury securities held with the DTCC.
In case there was ever any doubt.
“The Division is of the view that Canton Coin is a
“digital commodity”…”— Canton Network (@CantonNetwork) November 3, 2026
Morgan Stanley said on Tuesday that they were one of the first banks to utilise the service. This shows how traditional financial institutions are becoming much more interested in using blockchain technology to handle their financial assets.
Canton Network was developed by Digital Asset who raised $355 million earlier this year from a number of Wall Street firms and a sovereign wealth fund.
Limitations To The Letter
However, the SEC have made clear that the letter does not constitute a legal judgement. Instead it provides clarity on the view of SEC staff on whether they would recommend any enforcement actions. The decision has been made based on the facts and explanations provided by the Canton Network.
This is the first relief of its kind since the SEC released their interpretation on cryptocurrency regulations in March and proposed new crypto-related regulations in August.
The decision comes after the SEC and Commodity Futures Trading Commission have become more involved with creating regulation around crypto after the CLARITY Act failed to progress in the Senate in September.
Yuval Rooz, CEO of Canton Network, said that financial institutions require assurance that the technology and economics of the technology are reliable. While this could provide some assurance from the SEC, the full regulatory framework for the broader crypto industry is still being formed.
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