According to Galaxy Digital's Head of Research Alex Thorn, the changes could remove key regulatory obstacles that currently prevent automated market makers and decentralized exchanges from supporting tokenized US stocks. The proposal is part of the SEC’s effort to modernize market regulations and is now open for public comment for 60 days. SEC Move Could Boost Tokenized Stocks A proposal by the US Securities and Exchange Commission (SEC) to remove certain long-standing stock market rules could actually advance the development of tokenized US equities and their integration into decentralized finance (DeFi) platforms. The SEC has proposed eliminating two regulations that are part of the National Market System framework. The first, Rule 611, prohibits so-called “trade-throughs,” requiring stock orders to be executed at the best available price across all exchanges. Press release from the SEC The second, Rule 610(e), prevents exchanges from displaying price quotes that are equal to or worse than quotes already available elsewhere in the market. According to analysts, these rules have historically created major obstacles for blockchain-based trading systems and tokenized stocks. Galaxy Digital’s Head of Research, Alex Thorn, described the proposal as one of the biggest developments yet for tokenized equities. He argued that the current market structure rules are fundamentally incompatible with how automated market makers (AMMs) operate. AMMs are widely used in decentralized exchanges, and determine prices through liquidity pools rather than through traditional order books. As a result, trades are executed at the prevailing pool price regardless of whether a better quote may exist on another platform. Under the current regulatory framework, Thorn explained that AMMs trading tokenized stocks could continuously violate trade-through requirements because they are unable to check and route orders to the best available price across all trading venues. This raised concerns that such platforms could be viewed as operating outside existing securities regulations. The issue extends beyond trade execution. Because AMM prices change constantly as users interact with liquidity pools, they may also conflict with quote display requirements that are designed to ensure investors receive the best available market prices. Thorn believes the SEC may replace the existing framework with a broader “best execution” standard, which could provide more flexibility for decentralized trading models while still protecting investors. The proposal forms part of the SEC’s plan to modernize financial market regulations and accommodate emerging blockchain technologies. The agency launched Project Crypto in 2025 to develop clearer rules governing digital assets and blockchain-based financial infrastructure. The SEC opened the proposal for a 60-day public comment period before making a final decision.