Blockchain Association Endorses SEC Plan to Modernize 30-Year-Old Market Rules for Digital Assets

The Blockchain Association is backing the SEC's push to eliminate outdated NMS (National Market System) rules that have become roadblocks for tokenization and digital asset trading infrastructure.

The 2005 ruleset was designed to govern equity markets before crypto and blockchain technology existed. Now, these regulations are actively hindering innovation in how securities—and their tokenized versions—can be traded and settled on modern networks.

"The rules have failed to achieve their stated purposes," the Blockchain Association stated in their position, highlighting a critical gap between regulatory framework design and current market realities. This misalignment has become increasingly problematic as institutional investors and fintech companies push for blockchain-based settlement and trading systems that operate fundamentally differently from traditional equity markets.

Why This Matters for Crypto Market Infrastructure

The NMS rules were built around a centralized market model with traditional market makers, order routing, and the National Securities Exchanges Act framework. Tokenized securities and blockchain-native trading don't fit neatly into this structure. When you introduce distributed ledgers, peer-to-peer settlement, and 24/7 trading capabilities, the old playbook breaks down.

The SEC's proposal to scrap these antiquated rules would create regulatory flexibility for crypto-native trading platforms and tokenization protocols. This is significant because institutional capital has been sitting on the sidelines waiting for clearer guardrails around digital asset trading infrastructure.

The Broader Tokenization Play

We're seeing major financial institutions—from traditional investment banks to custody providers—quietly building tokenization infrastructure. Removing NMS constraints would accelerate deployment of these systems. Real-world assets (RWA) like bonds, commodities, and equities could settle faster and cheaper on blockchain networks if the SEC clears the path.

The Blockchain Association's support signals that industry players see this as a credibility moment. Rather than fighting regulation, they're advocating for sensible modernization. That's a strategic positioning move that strengthens the case for reasonable crypto regulation more broadly.

What's at Stake

For bitcoin, ethereum, and the broader crypto trading ecosystem, this matters indirectly but meaningfully. A regulatory environment that supports tokenized securities and blockchain-native settlement encourages institutional adoption of the underlying infrastructure—which includes major crypto exchanges and infrastructure providers. Better frameworks for digital assets = more institutional capital entering the space = improved liquidity and market depth.

The 2005 ruleset was reasonable for its time. But we're now in an era where blockchain settlement, automated market makers, and 24/7 trading are viable and increasingly demanded by sophisticated investors. Clinging to frameworks built for the pre-crypto era only ensures that innovation happens offshore or in regulatory gray zones.

The SEC moving forward with this proposal signals that at least some policymakers understand: modernization isn't about weakening market protections—it's about making them relevant to how markets actually operate today.