Nasdaq received formal approval from the U.S. Securities and Exchange Commission to trade some stocks in tokenized form. The plan covers Russell 1000 stocks and certain ETFs, with trades still flowing through traditional settlement rails. During a review, commenters questioned the mechanics, market risks, and the level of issuer control.
The U.S. Securities and Exchange Commission granted formal approval for Nasdaq’s proposal to trade some stocks in tokenized form. The changes will begin with Russell 1000 stocks and certain index ETFs, which must retain the same rights and trading priority as traditional shares.
Tokenized trades would still flow through the Depository Trust Company and revert to traditional settlement if needed. The SEC said several commenters raised questions about the model’s mechanics during the review.
Trade groups like SIFMA and Cboe Global Markets focused on the lack of clarity around DTC’s role. The blockchain policy group The Digital Chamber argued the SEC should avoid favoring specific firms and give issuers more say.
The nonprofit Better Markets opposed the proposal due to potential price gaps and surveillance concerns. By late November, major exchanges had warned that looser rules could create uneven regulation and new risks.
Steven Wu, chief operating officer at tokenization engine Clearpool, said the approval “starts to make listed equities more programmable, not just more digital.” “The SEC is opening the door for these assets to move beyond trading and into broader financial use cases,” he stated.
Samar Sen, head of international markets at Talos, noted institutions will watch how tokenized securities integrate with post-trade infrastructure. “Institutions will be looking closely at how tokenized securities plug into post-trade infrastructure… and whether liquidity develops consistently across both formats,” Sen added.
