SEC Moves to Scrap 20-Year Trading Rule, Opening Door for Blockchain Markets

The U.S. Securities and Exchange Commission has proposed eliminating a decades-old regulation that could fundamentally reshape how stocks trade—and potentially clear the path for blockchain-based trading systems to compete with traditional exchanges.

On June 11, the SEC filed a proposal to rescind Rule 611 of Regulation NMS, commonly known as the “trade-through rule.” Enacted roughly twenty years ago, this rule mandates that trading venues execute orders at the best available price across all exchanges, preventing investors from receiving inferior fills. While designed to protect retail traders, the regulation has also created technical barriers that make it difficult for newer technologies—including distributed ledger systems—to integrate with legacy market infrastructure.

The move signals a significant shift in the SEC’s approach to market structure. By removing this requirement, the agency could enable blockchain-based trading platforms to operate without needing to constantly reference prices from traditional stock exchanges. Several fintech firms and crypto-native companies have been developing tokenized securities and on-chain trading systems but have faced regulatory hurdles in gaining approval for U.S. equity markets.

Industry watchers believe this could accelerate the adoption of blockchain technology in mainstream finance. Tokenized stocks, real-time settlement, and smart contract-based order matching have long been touted as the future of capital markets, yet regulatory frameworks built for centralized exchanges have slowed implementation. If the proposal advances, it may allow these innovations to compete on a more level playing field.

The proposal will now enter a public comment period before any final decision is made. Critics argue that scrapping trade-through protections could harm retail investors by allowing less favorable executions, while proponents claim modern technology and competition will deliver better outcomes than prescriptive rules from the early 2000s.

For the crypto sector, the potential implications are substantial. A more flexible regulatory environment for trading infrastructure could bring digital assets and traditional securities closer together, bridging two worlds that have operated largely in parallel. Whether the SEC follows through remains to be seen, but the conversation has officially begun.

Based on reporting by the original source.