- Nasdaq plans to list tokenized and traditional securities in the same order book.
- Settlement would continue to occur through DTCC systems despite integration with blockchain technology.
- Industry reaction is mixed as regulators evaluate legal and operational risks.
The U.S. Securities and Exchange Commission (SEC) has opened a formal review that could determine whether tokenized shares may be traded on Nasdaq, subjecting blockchain-based securities to rigorous regulatory oversight.
By seeking public comment on Nasdaq’s proposed rule change, the SEC is assessing how digital representations of shares might fit within existing 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 will likely shape the pace at which blockchain technology becomes integrated into mainstream equity trading.
According to the SEC filing, Nasdaq requested approval to list and trade securities in tokenized form, initiating a broader consultation on regulatory, technical, and policy issues.
The review will determine whether tokenized shares can operate alongside traditional shares without altering core market safeguards.
Regulatory review begins
Under Nasdaq’s proposal, tokenized shares and exchange-traded products would trade in parallel with conventional shares.
Both formats would appear in the same order book and carry the same shareholder rights.
Clearing and settlement would remain with the Depository Trust & Clearing Corporation (DTCC), while blockchain technology would be used to improve operational efficiency.
By requesting feedback, the SEC signaled that approval is not guaranteed.
Regulators are evaluating whether tokenized securities can deliver faster, cheaper settlement without introducing new risks.
This consultation marks the start of a deeper review rather than a final decision.
How tokenized shares would trade
If approved, Nasdaq’s framework would let blockchain-based shares trade alongside ordinary shares on the same trading platform.
Investors would not need separate systems or accounts, because tokenized and traditional securities would coexist within the same trading environment.
Settlement would still rely on DTCC systems, ensuring continuity with current market processes.
Proponents argue this structure preserves investor protections while allowing blockchain to reduce settlement times and operational costs.
The SEC’s review will assess whether these efficiency gains outweigh potential complexities introduced by tokenized recordkeeping.
Industry views are divided
Market reaction to the proposal has been mixed. Industry groups have voiced support, highlighting tokenization’s potential to raise market efficiency and modernize post-trade processes.
Regulatory developments elsewhere also suggest increasing openness. The U.S. Commodity Futures Trading Commission approved a pilot program permitting tokenized assets to be used as collateral, indicating broader acceptance of blockchain-based financial instruments.
Still, opposition has emerged from firms such as Ondo Finance and Cboe Global Markets.
These companies argue the SEC should delay approval until the DTCC provides clearer guidance on how tokenized trades will be processed.
Their concern is that tokenized transactions would still depend on DTCC infrastructure, making clarity around settlement mechanics essential.