NEW YORK, July 9 (Reuters) - A top U.S. securities

regulator known for her supportive stance on the cryptocurrency

industry said on Wednesday that new models for trading

securities known as "tokenization" must still meet regulations

for other securities.

Hester Peirce, a Republican commissioner on the Securities

and Exchange Commission who has been nicknamed "crypto mom,"

said in a statement: "As powerful as blockchain technology is,

it does not have magical abilities to transform the nature of

the underlying asset. Tokenized securities are still

securities."

Tokenizing equities is a process by which shares of a

company are converted into a digital token, similar to how

cryptocurrencies are traded. Instead of holding the securities

directly, investors hold tokens that represent ownership of the

securities.

Such tokens could be created by the security issuer itself,

or by an entirely unrelated third party. Anyone who buys a

third-party token could face unique risks, she said.

Crypto firms and others have been increasingly discussing the

prospect of tokenizing securities as a new way to facilitate

trading. Coinbase recently told Reuters it was seeking

a U.S. green light from the SEC to offer blockchain-based

stocks.

SEC Chairman Paul Atkins, also a Republican, said in a CNBC

interview last week that the agency should encourage innovation

when asked about the prospect of tokenizing securities.

Critics say the new technology could become a way to evade

SEC oversight and expose retail investors to new risks.