- Nasdaq plans to list tokenized and traditional securities on the same order book.
- Settlement would still run through DTCC systems despite blockchain integration.
- The industry response is mixed as regulators assess legal and operational risks.
The US Securities and Exchange Commission has opened a formal review that could determine whether tokenized stocks may be traded on Nasdaq, bringing blockchain-based securities under intensified regulatory scrutiny.
By soliciting public comment on Nasdaq’s proposed rule change, the SEC is evaluating how digital representations of equities might fit within current market structures.
The move reflects growing interest in tokenization across financial markets while underscoring regulators’ focus on legal certainty, settlement integrity, and investor protection.
Any decision is likely to influence how quickly blockchain technology is adopted in mainstream equity trading.
According to the SEC filing, Nasdaq has requested approval to list and trade securities in tokenized form, initiating a broad consultation process that addresses regulatory, technical and policy considerations.
The review will determine whether tokenized shares can operate alongside conventional shares without undermining core market safeguards.
Regulatory review begins
Under Nasdaq’s proposal, tokenized shares and exchange-traded products would trade concurrently with conventional equities.
Both formats would appear on the same order book and carry the same shareholder rights.
Clearing and settlement would continue to run through the Depository Trust & Clearing Corporation (DTCC), while blockchain technology would be deployed to improve operational efficiency.
The SEC’s request for feedback indicates that approval is not guaranteed.
Regulators are instead weighing whether tokenized securities can deliver faster, cheaper settlement without creating new risks.
The consultation marks the start of a deeper assessment rather than a final determination.
How tokenized shares would trade
If approved, Nasdaq’s framework would allow blockchain-based shares to be traded in the same manner as ordinary shares.
Investors would not need separate systems or accounts, because tokenized and traditional securities would coexist within the same trading environment.
Settlement would remain dependent on DTCC systems, ensuring continuity with existing market processes.
Proponents say this approach preserves investor protections while allowing blockchain to cut settlement times and operating costs.
The SEC’s review will assess whether those efficiency gains outweigh the added complexities that tokenized recordkeeping and reconciliation could introduce.
Industry views are divided
Market reactions to the proposal have been mixed. Some industry groups have voiced support, highlighting tokenization’s potential to improve market efficiency and modernize post-trade processes.
Regulatory developments elsewhere also suggest growing openness to tokenized solutions.
The US Commodity Futures Trading Commission has approved a pilot program permitting tokenized assets to be used as collateral, signaling broader acceptance of blockchain-based financial instruments.
However, pushback has come from firms such as Ondo Finance and Cboe Global Markets.
These companies argue that the SEC should postpone approval until the DTCC provides clearer guidance on how tokenized trades will be settled.
Their concern centers on the fact that such transactions would still rely on DTCC infrastructure, making settlement clarity essential.