Key Highlights

  • Nasdaq received SEC authorization to enable blockchain-based token trading for select securities
  • Digital tokens will appear on identical order books as conventional shares, maintaining uniform pricing and shareholder privileges
  • Participation remains restricted to qualified entities, covering Russell 1000 securities and specific exchange-traded funds
  • The Depository Trust Company will manage transaction clearing and settlement processes for tokenized trades
  • A partnership between Nasdaq and Kraken aims to facilitate worldwide distribution of tokenized securities

On Wednesday, the SEC granted approval for Nasdaq’s proposal to introduce tokenized securities trading on its platform.

This authorization represents a significant development in bringing blockchain infrastructure into mainstream American financial markets.

The exchange initially submitted its proposal in September, requesting authorization to implement a pilot initiative in collaboration with the Depository Trust Company, the entity responsible for managing clearing and settlement operations for digital asset trades.

The approved framework allows qualified participants to select between conventional or tokenized formats when executing stock transactions.

Digital share representations will coexist on matching order books with standard shares. Trading prices, ticker symbols, and investor privileges remain identical across both formats.

The pilot program encompasses securities within the Russell 1000 Index, representing the nation’s top 1,000 publicly listed corporations by market capitalization. Exchange-traded funds that track the S&P 500 and Nasdaq-100 indexes also qualify for inclusion.

According to the SEC, this framework satisfies investor protection requirements. Market surveillance systems, data disclosure protocols, and settlement schedules continue operating under existing standards.

Tokenization transforms tangible assets into digital representations on distributed ledger systems. This technology enables accelerated settlement processes and opens possibilities for extended market operating hours.

During the regulatory review period, the SEC received commentary expressing concerns regarding market oversight capabilities and potential price discrepancies between digital and traditional share formats. Nasdaq responded by submitting amended documentation with enhanced clarifications.

Nasdaq’s Expanded Tokenization Strategy

Earlier in March, Nasdaq revealed a collaboration with cryptocurrency platform Kraken that enables clients to convert securities into blockchain-based tokens. This alliance also supports publicly traded corporations in issuing their own digital share representations.

Intercontinental Exchange, the parent organization of the New York Stock Exchange, has similarly entered this emerging sector. The company made a strategic investment in cryptocurrency platform OKX during early March, with intentions to introduce tokenized equity products and digital asset derivatives.

SEC Statement Details

SEC Chair Paul Atkins announced on Tuesday that the commission would soon solicit public input regarding various cryptocurrency-related regulatory exemptions. Among these proposals is a capital-raising exemption that would permit certain crypto-adjacent securities to raise specified amounts within twelve-month windows without formal registration under securities regulations.

The Nasdaq pilot operates in conjunction with a comprehensive DTC initiative created to evaluate blockchain-powered trade settlement infrastructure throughout American markets.

Nasdaq submitted its initial proposal in September 2025. The SEC granted final approval on March 18, 2026.

Participation remains exclusive to qualified entities. Involvement is voluntary, with participants maintaining the flexibility to choose traditional or tokenized execution methods for individual transactions.