Plume Network Proposes DeFi Sandbox and Regulatory Framework for Tokenized Securities
In a significant development for the decentralized finance (DeFi) industry, Plume Network has officially proposed the creation of a DeFi sandbox and the formulation of new regulatory frameworks for tokenized securities. This proposal was recently presented to the U.S. Securities and Exchange Commission (SEC) in a move that could mark a pivotal step in bridging traditional finance with blockchain innovation.
What Is Plume Network?
Plume Network is a blockchain protocol focused on compliant asset tokenization and infrastructure for regulated digital securities. Its goal is to streamline the launch, management, and exchange of tokenized assets on-chain, while ensuring regulatory compliance in jurisdictions like the United States.
What Did Plume Propose?
According to a report by Deep Tide TechFlow, Plume representatives met with the SEC on May 25, 2025, to propose two key initiatives:
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Establishment of a DeFi Regulatory Sandbox
A “sandbox” is a safe and controlled testing environment that allows projects to experiment with innovative technologies under the oversight of regulators without immediately facing the full weight of regulatory enforcement.
Plume’s sandbox would allow DeFi projects to operate within set parameters while collaborating closely with regulators. This aims to promote responsible innovation and reduce regulatory uncertainty, especially for emerging projects and tokenized asset protocols. -
New Rules for Tokenized Securities
The proposal also included the drafting of new rules specific to tokenized securities. Tokenized securities represent traditional financial instruments such as stocks, bonds, or real estate investment trusts (REITs) in the form of blockchain-based tokens.
Plume argued that current securities regulations, developed decades ago, are not well-suited to handle the programmable and borderless nature of blockchain assets. The company suggested that a more tailored approach would foster growth while ensuring investor protection.
Why This Matters
As the lines between traditional finance and decentralized ecosystems continue to blur, regulators and innovators alike are looking for ways to coexist. Plume’s approach represents a middle path—seeking open dialogue rather than confrontation with regulatory authorities.
A DeFi sandbox could provide:
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Legal clarity for DeFi protocols and asset issuers
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Investor protection through transparency and oversight
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Encouragement of innovation in the digital asset space
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Reduction in compliance costs for startups through guided experimentation
Industry Reactions
While the SEC has not yet publicly responded to Plume’s proposal, the crypto community has shown cautious optimism. Industry experts believe that such collaborative efforts could set a precedent for how regulators and Web3 companies engage moving forward.
If adopted, this model could serve as a blueprint for global regulators, many of whom are struggling to keep pace with the rapid evolution of blockchain-based finance.
Conclusion
Plume Network’s proposal is a bold and necessary step in shaping the future of decentralized finance. As discussions between blockchain innovators and regulators continue to evolve, efforts like these may help create a compliant and thriving environment for tokenized assets in the United States and beyond.
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