Hedera, the blockchain network known for its enterprise council governance, is seeking clearer regulatory guidelines for its native token HBAR. However, recent discussions have emphasized that regulatory clarity would not give HBAR holders any claim to the network’s income.
Industry calls for SEC clarity
On October 20, Hedera joined other industry participants—including Aptos Labs, Ava Labs, Stellar Development Foundation, Cardano Foundation, and Chainlink Labs—in a joint letter addressed to the US Securities and Exchange Commission (SEC). The signatories urged the SEC to formalize a digital-commodity definition in binding rule text, seeking greater regulatory certainty for token issuers and market participants.
This collective effort responds to the SEC’s March communication, which cited HBAR among cryptocurrencies serving as “illustrations” in discussions of regulatory scope, according to SEC Chairman Paul Atkins. While this list offers examples, it is not considered comprehensive or definitive.
A less-publicized aspect of the letter focused on trading conditions. The participating organizations requested that secondary-market sales of tokens by parties other than issuers should not automatically be treated as involving investment contracts. If addressed, this could ease compliance concerns for exchanges and custodians handling digital assets.
Hedera and several other blockchain organizations asked the SEC to set a clear definition for digital commodities, aiming to reduce ambiguity for both trading and custody of tokens like HBAR. The letter seeks an official rule rather than a non-binding interpretation.
Dana Love, a commentator analyzing the proposal, emphasized that while clearer rules might improve trading conditions and token custody, they would not fundamentally alter how HBAR accrues value for holders.
Love also highlighted a structural distinction in Hedera’s ecosystem. The Hedera network is governed by a council of major enterprises, a setup that has driven discussions about operational, economic, and voting control within regulatory contexts. The SEC’s language does not explicitly require network decentralization, and still counted HBAR as an example in previous statements.
Mini dictionary: Hedera (Hedera Hashgraph) is an enterprise-focused blockchain platform that uses a unique hashgraph consensus mechanism and is governed by a council of global corporations. Its native token, HBAR, is primarily used for transaction fees and network services.
Network growth and HBAR value disconnect
Despite a 168.4% surge in monthly transactions, HBAR’s market value dropped from $0.1047 at the start of October to $0.0799 three weeks into the month. Analysts have pointed to this divergence, noting that increased usage does not always translate into higher token prices.
Transaction fees on Hedera are denominated in dollars but paid in HBAR. As the price of HBAR rises, fewer tokens are needed per transaction. While this approach stabilizes business expenses, it also weakens the link between user activity and token demand.
| Metric | Value | Trend |
|---|---|---|
| Monthly network transactions | 168.4% increase | Rising |
| HBAR price (Oct open) | $0.1047 | Falling |
| HBAR price (after 3 weeks) | $0.0799 | Falling |
Under the current structure, holding HBAR does not entitle investors to a portion of network fee revenue. As explained by Love, staking rewards form a separate category, separate from transaction-based income.
Holding HBAR alone does not provide rights to network profits, as transaction fees are directed to support network operations and not shared with token holders. Token staking rewards remain an independent mechanism within the ecosystem.
ETF flows and implications for investors
Love also discussed data from the Canary HBAR ETF, which recorded $106.5 million in paid-in capital but only $46.1 million in net assets as of June’s end. He cautioned against reading the gap solely as investor withdrawals, given HBAR’s concurrent price decline.
For investors, the proposed regulatory safeguards could deliver more immediate benefits by reducing trading and custody risk exposure. However, these changes would not grant new claims on Hedera’s fee structure or alter its prevailing income distribution model.
