The U.S. Securities and Exchange Commission has approved Nasdaq‘s pilot program to allow the trading of tokenized stocks. Qualified participants can settle trades in tokenized form through the Depository Trust Company. These digital assets will trade on the same order book as traditional shares, with identical prices, tickers, and shareholder rights.
The U.S. Securities and Exchange Commission (SEC) has formally approved Nasdaq’s pilot scheme to facilitate trading of tokenized versions of stocks and other securities. This marks a milestone toward integrating blockchain-based assets with traditional market systems.
Qualified individuals may execute trades in a tokenized manner by participating in a pilot program managed by the Depository Trust Company (DTC). Tokenized assets will trade just like conventional stocks on the same order book, at the same price, and with the same ticker.
The options for tokenized stock are confined to securities within the Russell 1000 Index, and the exchange-traded funds that mirror the S&P 500 and Nasdaq-100 indices. The SEC had initially criticized the proposal for issues around market surveillance and the risk of divergent prices.
These concerns were later resolved through an amendment to the plan. Tokenized shares must offer exactly the same rights and benefits to shareholders as regular stocks, including voting rights and dividends.
The decision recognizes increasing interest in the tokenization of regulated financial markets. Exchanges and service providers are turning to blockchain technologies to represent traditional assets.
