NEW YORK, Sept 8, 2025 — Nasdaq has submitted a formal proposal to the U.S. Securities and Exchange Commission (SEC) that would enable trading of tokenized securities—representations of traditional financial instruments transformed into blockchain-based digital tokens—on its main exchange. If approved, this would mark a historic first for a U.S. stock exchange integrating tokenized assets into the national market system.
What’s Proposed?
Nasdaq’s rule amendment would allow member firms and investors to trade tokenized versions of listed stocks and exchange-traded products (ETPs) directly alongside their traditional equivalents. Crucially:
- Tokenized securities would maintain the same material rights as traditional forms—such as voting, dividends, and legal protections—to ensure parity.
- Trades of both forms could occur within a unified marketplace, using the same order book, surveillance tools, and execution protocols.
- The first token-settled trades could occur as early as Q3 2026, pending the Depository Trust Company’s (DTC) readiness to support blockchain settlement.
The Regulation Shift
This move aligns with broader efforts under the Trump administration to loosen crypto-exchange constraints. Nasdaq emphasises that full investor protections must remain intact, rejecting any wholesale exemptions from national market safeguards. The proposed framework also respects the SEC’s cautious stance, reinforcing that tokenized securities must adhere to existing securities laws.
Why It Matters
Market demands are evolving. Tokenization is gaining traction for its potential to:
- Improve settlement speed and efficiency.
- Enable 24/7 trading across global markets.
- Offer fractional ownership and lower-entry investment opportunities.
Global firms like Coinbase, as well as institutions like Citi and Bank of America, are already exploring tokenization models.
Challenges Ahead
Experts warn that tokenizing traditional securities is a complex shift. It entails:
- Regulatory alignment across multiple systems.
- Modernizing clearing and settlement infrastructure.
- Safeguarding liquidity and ensuring market stability.
Nonetheless, Nasdaq’s proposal could fast-track blockchain’s entry into mainstream finance—providing a transformative blueprint for how securities may be issued, traded, and settled.
