The U.S. Securities and Exchange Commission has approved Nasdaq rule changes that allow trading of securities in tokenized form, marking a major step toward integrating blockchain-based assets into traditional market infrastructure.
This approval allows covered securities, including ETFs that track major indexes such as Russell 1000 stocks and the S&P 500, to be displayed and traded as tokenized assets on Nasdaq. These tokenized versions trade on the same order book as traditional stocks and have the same execution priorities, pricing, and market data processing.
Under this framework, tokenized securities should be fully fungible with traditional securities and share the same ticker, CUSIP, and shareholder rights. Investors in tokenized shares retain standard protections such as voting rights, access to dividends, and claims on residual assets, ensuring consistency with existing securities laws.
The system will be operational through a pilot program led by the Depository Trust Company, which will handle the post-trade settlement and tokenization process. Market participants can choose to settle trades in tokenized form by selecting the instructions provided during order entry, but trades that cannot meet the tokenization requirements will default to traditional settlement.
Nasdaq’s core trading infrastructure remains unchanged. All order types, routing strategies, and trading sessions support tokenized securities, and the monitoring system monitors both tokenized and traditional stocks using the same data. Settlement will continue on a T+1 basis, aligning tokenized transactions with current market standards.
The SEC said the proposal meets regulatory requirements aimed at protecting investors and maintaining fair and orderly markets, and addresses concerns about market integrity, shareholder rights, and price consistency between tokenized and traditional securities.
The approval reflects growing momentum around tokenization within regulated financial markets, as exchanges and infrastructure providers seek blockchain-based representations of traditional assets without departing from existing regulatory frameworks.
Disclosure: This article was edited by Estefano Gómez. Please see our Editorial Policy for more information on how we create and review content.
