TLDR
The SEC has proposed reforms that could make issuing and trading tokenized stocks on blockchains much easier in the United States.
- The SEC wants to rescind key Regulation NMS rules that currently make tokenized equities on DeFi-style venues legally awkward.
- This could unlock on-chain trading of tokenized stocks and ETFs, but big questions remain around venues, custody, and settlement.
- The change is only a proposal with a comment period and political risk, so timelines and final scope are still uncertain.
Deep Dive
1. What The SEC Changed
On 11 June 2026, the SEC proposed rescinding Rule 611 and Rule 610(e) of Regulation NMS, which enforce trade-through protection and ban locked or crossed markets for U.S. equities. These rules assume routed order books that always respect the national best bid and offer (NBBO), which automated market makers on public chains cannot do.
Analysts at Benchmark and others argue that removing these rules and replacing them with a principles based best execution standard at the broker level would remove one of the biggest structural barriers to tokenized U.S. equities trading on AMMs, making such trading legally workable for the first time in the U.S. equity framework.[](https://www.tradingview.com/news/the_block:b8075b009094b:0-benchmark-says-sec-s-nms-proposal-is-the-most-consequential-us-crypto-rule-this-year/)
The SEC is not legalizing DeFi stocks overnight, but it is targeting the exact rules that made compliant tokenized stock trading on-chain nearly impossible.
2. How This Helps Tokenized Stocks
A CoinsKid analysis notes that Rule 611 has been one of the biggest structural barriers to tokenized U.S. equities on DeFi, since AMMs cannot route to every venue to guarantee NBBO.[]() Removing it lets brokers show they seek best execution in aggregate, even if individual on-chain swaps do not reference NBBO.
This opens a clearer path for regulated tokenization platforms like Securitize, and for exchanges and brokers with tokenization strategies, including Coinbase and Galaxy, to support tokenized equities natively on-chain. Parallel developments, such as the SECs draft strategic plan that explicitly calls out digital assets and a planned framework for listing tokenized securities, point to tokenization becoming part of mainstream market plumbing rather than a side experiment.[](https://cryptoslate.com/how-the-secs-five-year-plan-could-accelerate-tokenized-capital-markets/)
3. Risks, Politics, And Timeline
The proposal is in a 60 day public comment period, with a final vote expected around early 2027, and possible exemptive relief for pilot tokenized stock programs before that.[]() It does not yet solve harder issues like exchange or ATS registration, custody rules, or on-chain clearance and settlement.
Separately, the SEC has floated an innovation exemption for tokenized stocks, but ex SEC lawyers warn that exemptions and rule tweaks can be reversed by a new commission if Congress does not pass durable legislation such as the CLARITY Act.?
The direction of travel favors tokenization, but business models that rely on these reforms still carry regulatory and political risk until final rules and laws are in place.
Conclusion
The SECs move targets the specific legacy equity rules that clashed with DeFi style trading, which genuinely opens the door for compliant tokenized stocks to grow on public chains. For crypto users and builders, the opportunity is significant, but it depends on how the final rule, venue licensing, custody standards, and broader legislation like the CLARITY Act ultimately land.
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