SEC Clears Nasdaq Plan to Bring Tokenized Stocks to Wall Street

The U.S. Securities and Exchange Commission (SEC) has officially approved Nasdaq’s plan to introduce tokenized stock trading, marking a historic step toward integrating blockchain technology into traditional financial markets. 

The approval allows Nasdaq to offer certain stocks and exchange-traded products in both traditional and tokenized formats, meaning investors can hold the same asset either as a conventional share or as a blockchain-based digital token. 

Tokenized Stocks Enter the Main Market

Under the new framework, tokenized equities will be fully integrated into Nasdaq’s existing trading system, not separated into a different marketplace.

Key features include:

• Tokenized and traditional shares trade on the same order book

• Investors receive identical rights (dividends, voting, ownership)

• Same ticker symbols and CUSIP identifiers

• Standard T+1 settlement via the Depository Trust Company (DTC)

Initially, eligible assets will include:

• Stocks in the Russell 1000 Index

• ETFs tracking major benchmarks like the S&P 500 and Nasdaq-100

This ensures the rollout starts with high-liquidity, large-cap assets.

How the Tokenization Process Works

Investors will be able to choose whether they want their shares in tokenized or traditional form at the time of trade by selecting a “tokenization flag.” 

The process works as follows:

1. Trade executes normally on Nasdaq

2. Settlement occurs through existing infrastructure (DTC)

3. Shares are then converted into blockchain-based tokens post-trade

While settlement remains T+1 for now, once tokenized, the assets can be transferred more efficiently and potentially used for collateral, margin, or DeFi integrations. 

A Major Step Toward On-Chain Equities

This is the first time a U.S. stock exchange has received regulatory approval to integrate tokenized securities directly into its core trading infrastructure. 

The move reflects a broader trend across Wall Street, where major institutions are racing to adopt tokenization to:

• Improve settlement efficiency

• Enable 24/7 trading in the future

• Reduce reliance on legacy financial infrastructure

Competitors like the NYSE (Intercontinental Exchange) are also developing similar blockchain-based systems.