The U.S. Securities and Exchange Commission (SEC) on Wednesday approved Nasdaq’s proposal to allow certain securities to be traded in tokenized form, marking a key milestone in integrating blockchain technology into the U.S. stock market.
Nasdaq’s tokenization plan is tied to a pilot run by Depository Trust Companies (DTCs), which are responsible for clearing and settling tokenized transactions. Nasdaq applied for regulatory approval in September,
Under this framework, eligible Nasdaq participants can choose to settle their trades as blockchain-based tokens rather than standard book-entry systems.
Tokenized stocks trade parallel to traditional stocks on the same order book and at the same price. They have the same rights, use the same ticker and CUSIP (identification number), and follow existing market rules.
The SEC said the structure meets investor protection standards, noting that oversight, data reporting and settlement schedules are intact.
The move comes as tokenization of traditional assets such as stocks, bonds, and funds has become a fast-growing area in the digital asset space. This process enables near-instantaneous, 24-hour trading using tokens tied to real-world assets.
This trend has captivated major US exchanges. Nasdaq announced last week that it is developing a framework that would allow listed companies to issue blockchain-based shares of their own stock. We have partnered with the virtual currency exchange Kraken to distribute tokenized stocks around the world. Meanwhile, NYSE owner Intercontinental Exchange (ICE) has invested in cryptocurrency exchange OKX with plans to launch new tokenized stocks and crypto futures.
Read more: Here’s why the owners of Nasdaq and NYSE are putting their $126 trillion stock market on the blockchain
