The U.S. Securities and Exchange Commission (SEC) has granted approval for Nasdaq to pilot a program allowing certain securities to trade in a tokenized format. This decision marks a pivotal step towards incorporating blockchain technology into the U.S. equity markets.
Nasdaq’s initiative is part of a broader pilot program managed by the Depository Trust Company (DTC), which will oversee the clearing and settlement of these tokenized trades. The exchange initially sought regulatory approval for this venture in September.
Under the new framework, eligible participants on Nasdaq will have the option to settle trades using blockchain-based tokens instead of conventional book-entry systems. These tokenized shares will coexist with traditional stocks on the same order book, maintaining identical pricing and rights, and will utilize the same ticker symbols and CUSIP identification numbers.
The SEC has affirmed that this structure adheres to investor protection standards, ensuring that surveillance, data reporting, and settlement timelines remain consistent with existing regulations.
The approval aligns with a growing trend in the digital asset sector, where the tokenization of traditional assets such as stocks, bonds, and funds is rapidly gaining traction. This process enables near-instantaneous trading around the clock, linking tokens directly to real-world assets.
Major U.S. exchanges are increasingly drawn to this trend. Recently, Nasdaq announced its plans to develop a framework allowing publicly listed companies to issue blockchain-based shares. In collaboration with crypto exchange Kraken, Nasdaq aims to distribute these tokenized stocks globally. Similarly, the Intercontinental Exchange (ICE), which owns the New York Stock Exchange, has invested in crypto exchange OKX, with intentions to introduce new tokenized stocks and crypto futures.
The SEC's approval of Nasdaq's tokenized securities pilot represents a significant advancement in integrating blockchain technology into U.S. equity markets. This initiative allows for the trading of tokenized shares alongside traditional stocks, promising enhanced trading efficiency and accessibility.