The Blockchain Association, a trade group representing major players in the digital asset industry, has called on the Securities and Exchange Commission to drop two trading rules under the National Market System framework. The group argues the rules no longer serve their original purpose and could slow the integration of tokenized assets into mainstream trading venues.
The NMS rules in question date back to an earlier era of market structure regulation, before blockchain-based settlement and tokenized securities became a practical consideration for regulators. The Blockchain Association's position is that these rules were designed for a market environment that no longer reflects how trading infrastructure is evolving.
Notably, the SEC itself has already floated a proposal to rescind the same two rules. The Blockchain Association's comment letter effectively backs that existing SEC initiative rather than introducing a wholly new demand. This alignment suggests some degree of shared thinking between industry advocates and at least part of the commission on how outdated rules intersect with newer market technologies.
The group's submission ties the rule change directly to tokenization, the process of representing traditional financial instruments or assets as digital tokens on a blockchain. Industry participants have argued for several years that tokenized markets require regulatory frameworks flexible enough to accommodate new settlement and custody models. Rules built around older market structures, they say, can create friction or ambiguity for tokenized trading products.
Regulatory clarity around market structure has become a central theme in crypto policy debates over the past two years. Trade associations like the Blockchain Association have increasingly engaged directly with SEC rulemaking processes, rather than relying solely on litigation or legislative advocacy. Submitting formal comments on specific rule proposals is one avenue for shaping how new technology is treated under existing securities law.
The SEC has not finalized action on the proposal to remove the two NMS rules. Comment periods on rule changes typically allow multiple stakeholders, including exchanges, broker-dealers, and technology firms, to weigh in before the commission moves toward a final decision. It remains to be seen how other market participants, including traditional exchanges, will respond to the proposal.
The Blockchain Association has positioned itself as a recurring voice in SEC rulemaking discussions tied to digital assets. Its latest comments continue a pattern of engaging with specific technical rule changes, rather than broad policy statements, as the commission works through a backlog of market structure questions raised by the growth of blockchain-based finance.
Market Impact
If the SEC ultimately removes the two NMS rules, market structure could shift to more directly accommodate tokenized trading products alongside conventional securities. Supporters argue this would reduce regulatory ambiguity for firms building tokenization infrastructure, potentially encouraging further investment in that space.
The practical effect on trading volumes or specific asset classes remains uncertain until the SEC issues a final decision. Any rule change would likely unfold over an extended comment and review period, meaning near-term market impact is expected to be limited while the process continues.
The Blockchain Association's endorsement adds industry weight to an SEC proposal already in motion, underscoring how tokenization has become a recurring reference point in market structure debates. The rule change's fate now depends on the SEC's broader rulemaking timeline.
Frequently Asked Questions
What is the Blockchain Association asking the SEC to do?
It is urging the SEC to eliminate two National Market System trading rules that it considers outdated for current market structure.
Is this a new SEC proposal or an existing one?
The SEC had already proposed rescinding the same two rules, and the Blockchain Association's comments support that existing proposal.
Why does the Blockchain Association link this to tokenization?
The group argues the outdated rules could create friction for tokenized trading products, and removing them would better align regulation with blockchain-based market infrastructure.
Has the SEC finalized any decision on these rules?
No final decision has been reported. Rule changes typically go through a comment and review process before the commission acts.