SEC Ditches Obsolete Rules to Boost Tokenized Stock Trading

The U.S. Securities and Exchange Commission (SEC) has proposed eliminating two long-standing market structure rules to facilitate tokenized stock trading.

The proposal, which could ease barriers for Tokenized Stock platforms, aims to modernize the existing securities laws and regulations surrounding blockchain-based equity trading.

Alex Thorn from Galaxy Research argued that the current framework is no longer relevant, citing decentralized trading systems' struggles with trade-through requirements due to their direct execution against liquidity pools.

The proposed reforms could replace prescriptive requirements with a broader best-execution standard, focusing on overall execution quality rather than venue-by-venue price comparisons.