Catenaa, Monday, August 24, 2026- The Blockchain Association is urging the Securities and Exchange Commission to scrap two decades-old stock trading rules, arguing their removal could make it easier to build tokenized securities markets on public blockchains.
The industry group backed the SEC’s June proposal to eliminate Rules 611 and 610(e) of Regulation National Market System, or Regulation NMS.
Rule 611, known as the trade-through rule, generally requires trading centers to avoid executing an order at an inferior price when a better protected quotation is available elsewhere.
Rule 610(e) restricts exchanges from displaying locked or crossed quotations.Both rules were adopted in 2005, long before securities began trading or settling through blockchain infrastructure. The SEC’s public comment period closed Aug. 17.
The SEC proposed rescinding both rules on June 11, arguing US equity markets have become faster, more automated and more interconnected since Regulation NMS was introduced.
The agency said the rules have also contributed to market complexity, increased costs and limited choices in order handling and execution. The Blockchain Association agrees but argues technological change has now gone further.
Its comment letter says tokenized securities can trade through systems that differ fundamentally from the conventional exchange order books for which Regulation NMS was designed.
Those systems can include automated market makers and other blockchain-based execution methods.
Requiring them to operate around rules built for traditional quotations and exchange routing could limit the benefits of tokenization, the association argued. Rule 611 was designed to prevent investors’ trades from bypassing better displayed prices at other exchanges.
But the Blockchain Association argues that execution quality involves more than the displayed price. A trader using tokenized securities could also value transaction fees, settlement speed, self-custody, liquidity, execution certainty or the ability to move an asset between blockchain applications.
The association wants regulators to allow brokers to consider those factors when determining best execution. It also urged the SEC to recognize that an onchain execution system can satisfy fair and efficient execution requirements. That could become increasingly relevant if tokenized securities begin trading across conventional exchanges and blockchain-native venues at the same time.
The debate is no longer theoretical.SEC staff in January established a framework describing different forms of tokenized securities.
The agency has since approved rule changes allowing Nasdaq and the New York Stock Exchange to support trading of eligible securities in tokenized form through a Depository Trust Company pilot.
The Blockchain Association said the market value of tokenized stocks had climbed above $2.4 billion by early August, citing RWA.xyz data.Unlike conventional equities, blockchain-based representations can potentially move between compatible wallets and applications and settle much faster.
Some systems can also operate beyond normal exchange hours. The association argues those features create forms of value that Regulation NMS’s existing price-routing requirements do not adequately recognize. Removing Rules 611 and 610(e) would not deregulate tokenized stocks.
That distinction is important.
SEC staff has already stated that changing the technological format of a security does not change its legal status. A stock represented on a blockchain remains an equity security and remains subject to applicable federal securities laws. Broker-dealer, exchange, custody, disclosure and other requirements could still apply.
The current debate is narrower.
It concerns how trading rules written for traditional exchange infrastructure should apply when the same securities begin moving through blockchain-based systems.
Tokenization could make that question increasingly difficult to avoid. Traditional US equity trading depends on multiple exchanges, brokers, market makers, clearing systems and consolidated quotation infrastructure.
Public blockchains can combine parts of trading, recordkeeping and settlement within shared networks. Automated market makers can also calculate prices differently from conventional order books.
Those characteristics can clash with rules requiring platforms to identify and route toward specific protected quotations across regulated venues.
The Blockchain Association argues that removing Rules 611 and 610(e) would give market participants more freedom to test alternative execution systems.
The SEC has not yet decided whether to adopt the rescission proposal.
Catenaa View
The importance of the Regulation NMS review extends well beyond two old trading rules.
It raises a larger question: Should tokenized Wall Street be forced to operate like Wall Street did in 2005?
Putting a stock on a blockchain is relatively easy.
Allowing it to trade, settle and move through blockchain infrastructure while complying with US market rules is much harder.
Regulation NMS was designed around exchanges competing through displayed quotations and brokers routing orders between them.
Blockchain markets can introduce continuous trading, near-instant settlement, programmable transactions and new execution models.
Those features do not remove the need for investor protection or best execution. They may, however, require regulators to reconsider how those protections are achieved. Rescinding the two rules would therefore not create a tokenized stock market overnight.
But it could remove one structural obstacle as the SEC tries to fit blockchain-based trading into mainstream US capital markets.
The SEC adopted Regulation NMS in 2005 to modernize US equity trading across competing markets. Rule 611 established protection against trade-throughs, while Rule 610(e) restricted locked and crossed quotations. The SEC proposed rescinding both on June 11, 2026, saying technological and structural changes had reduced their usefulness and created unintended costs. The Blockchain Association’s Aug. 17 comment argues the case for repeal has become stronger as tokenized securities and blockchain-based execution systems develop.
