Fidelity Investments, the third-largest asset manager in the United States, sent a letter to the SEC on March 22 urging the regulator to build a full framework that lets broker-dealers custody, trade, and offer crypto assets on alternative trading systems. The letter, signed by General Counsel Roberto Braceras, responded to a call for comments issued earlier this month by the SEC's Crypto Task Force.
The request goes beyond what most institutional players have asked for publicly. Fidelity wants the SEC to address tokenized securities, distributed ledger technology for recordkeeping, and the regulatory gap between centralized exchanges and decentralized protocols.
What Fidelity Is Asking For
The letter makes three concrete demands.
First, the SEC should create clear rules for broker-dealers to trade tokenized securities issued by third parties on ATS platforms. Current regulations were written for traditional equity and fixed-income instruments. Tokenized assets break assumptions baked into those rules because their structures vary widely. As Braceras wrote, "In some models, the crypto asset represents a holder's indirect interest in the underlying security through a securities entitlement, while in others, the crypto asset may constitute a securities-based swap."
Second, the SEC should issue guidance explicitly permitting broker-dealers to use distributed ledger technology for ATS operations and recordkeeping. This would remove a gray area that has kept many traditional firms from integrating blockchain infrastructure into their compliance workflows.
Third, the SEC should "consider how intermediated and disintermediated trading venues can evolve and coexist." In plain terms: figure out how DeFi fits into the existing regulatory architecture before the gap between on-chain and off-chain trading becomes unmanageable.
Why a $5.8 Trillion Asset Manager Is Pushing This
Fidelity is not a newcomer to crypto. The firm launched its Digital Assets subsidiary in 2018, runs a spot Bitcoin ETF (FBTC), and has been offering crypto custody to institutional clients for years. But its existing crypto infrastructure operates in a regulatory patchwork. Each new product requires bespoke legal interpretation because the SEC has not published a unified framework for how broker-dealers should handle digital assets.
The timing matters. The SEC's Crypto Task Force, led by Commissioner Hester Peirce, opened its request for information on national securities exchanges and alternative trading systems trading crypto assets in December 2025. Fidelity's response lands during a period of accelerating institutional activity. Morgan Stanley filed to launch the first spot Bitcoin ETF from a US bank earlier this month, and Coinbase tokenized its Bitcoin yield fund on Base using the ERC-3643 standard with Apex Group as transfer agent.
The letter also arrives as the SEC and CFTC have begun classifying crypto assets into digital commodity and security buckets, and as the CFTC has started telling futures brokers how to accept crypto as collateral. Fidelity's letter suggests the firm sees a narrow window to influence how the rules get written.
The DeFi Question No One Has Answered
The most pointed part of Fidelity's letter concerns decentralized finance. Braceras argued that the SEC's existing reporting requirements cannot be applied to DeFi platforms because those platforms lack a central authority capable of producing detailed financial reports. Rather than ignoring DeFi or banning it, Fidelity wants the SEC to build a parallel framework.
This is a significant position from a $5.8 trillion traditional finance firm. Most institutional comment letters stick to asking for clarity on tokenized securities and custody. Fidelity is asking the SEC to acknowledge that decentralized venues are a permanent feature of the market and to regulate them accordingly.
The real-world asset angle is equally broad. Fidelity's letter notes that tokenized RWAs now span equities, real estate, bonds, and private credit. Each asset class creates different custody, trading, and reporting obligations. Without a unified framework, broker-dealers either avoid these markets entirely or operate under legal uncertainty that exposes them to enforcement risk.
What Happens Next
The SEC's Crypto Task Force will compile responses from Fidelity and other commenters before issuing recommendations. No timeline has been set for final rulemaking. Commissioner Peirce has been publicly supportive of expanding crypto access through existing market infrastructure, but the full commission has not signaled whether it will move quickly.
For crypto card users and retail holders, the downstream effects are indirect but meaningful. If broker-dealers get a clear ATS framework, more crypto assets could become accessible through traditional brokerage accounts. Tokenized securities traded on regulated venues could eventually feed into payment and spending products, connecting the institutional pipeline to the consumer layer.
As of March 23, 2026, BTC trades at $67,586 (-2.0% in 24 hours), ETH at $2,041 (-2.3%), and the Fear and Greed Index sits at 25, firmly in "Fear" territory. The market is not reacting to Fidelity's letter specifically, but the regulatory groundwork being laid now will determine how the next cycle's institutional capital flows into crypto.
Overview
Fidelity's general counsel sent a letter to the SEC on March 22 requesting a comprehensive framework for broker-dealers to trade crypto assets on alternative trading systems. The letter calls for clear rules on tokenized securities, DLT-based recordkeeping guidance, and a regulatory bridge between centralized and decentralized trading venues. It responds to the SEC Crypto Task Force's December 2025 request for information and lands alongside a wave of institutional crypto products from Morgan Stanley, Coinbase, and others.
