Nasdaq Seeks U.S. SEC Approval to Tokenize Stocks

Nasdaq submitted a rule change request to the U.S. Securities and Exchange Commission seeking approval to offer tokenized versions of existing equities on its blockchain network. Under the proposal, market participants would have the option to trade stocks in digital token form with the same priority and protections as conventional equity orders. The exchange intends to clear and settle tokenized trades through the established Depository Trust Company infrastructure, leveraging its national market system framework.

The filing emphasizes that tokenization can coexist with traditional trading, offering novel capabilities such as programmable ownership rights, on-chain proxy voting, and more granular settlement options. Nasdaq highlighted that tokenized assets would carry identical voting, dividend, and liquidation rights to their off-chain counterparts, ensuring investor protections are maintained. The proposal follows pilot initiatives by brokerage platforms seeking to issue stock tokens for European clients, signaling growing institutional interest in programmable securities.

Industry observers note that tokenizing real-world assets on a regulated exchange could reduce operational friction, cut settlement times, and open new revenue streams. The initiative aligns with broader regulatory pushes under Project Crypto, where the SEC and CFTC have signaled support for modernizing financial infrastructure via distributed ledger technology. Persisting concerns around custody, governance, and AML compliance are addressed in the filing, which outlines strict on-chain surveillance measures and integrates with AML/KYC systems.

If approved, Nasdaq’s tokenization offering would allow clients to choose between legacy or on-chain execution at order entry, with no impact on execution priority. The exchange would treat token orders equivalently, ensuring a unified order book. Nasdaq President Tal Cohen described the proposal as an evolution of digital finance infrastructure, leveraging blockchain’s unique characteristics to enhance market efficiency. Market participants are awaiting the SEC’s feedback, expected later this year, to gauge regulatory appetite for mainstream tokenized equity trading.