Blockchain Meets Wall Street: Nasdaq Seeks to Tokenize U.S. Stocks

Nasdaq is seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch tokenized stock trading, a move that could mark a significant step in integrating blockchain technology into traditional equity markets. The exchange submitted a rule change proposal to the SEC, requesting an amendment to the definition of a security to allow tokenized shares to be traded under the same execution and documentation requirements as traditional equities. The initiative aims to leverage blockchain technology to enhance liquidity, enable fractional ownership, and expand access to global investors.

According to the proposal, tokenized shares would carry the same rights and protections as traditional securities, with the condition that they be clearly labeled to ensure they are processed like conventional stocks during settlement and clearing. Nasdaq emphasized that the plan aligns with existing market infrastructure and investor protection frameworks, ensuring that core regulatory safeguards remain intact. The exchange highlighted that tokenized securities would be given equal execution priority alongside traditional assets, maintaining the integrity of the market structure.

The proposal also outlines the potential for on-chain settlement once the central clearing infrastructure is ready, with the Depository Trust Company (DTC) anticipated to support the model. If implemented, the initiative could bring tokenized shares into regulated U.S. markets as early as the third quarter of 2026, depending on the SEC’s approval timeline. The filing comes amid a broader regulatory shift in Washington, where lawmakers are drafting legislation to clarify how tokenized assets fit under the jurisdiction of the SEC and the Commodity Futures Trading Commission (CFTC). The proposed legislation aims to establish standards for custody, audits, and reporting without reclassifying non-securities as securities.

The push for tokenized securities is also supported by industry players who advocate for maintaining regulatory parity with traditional assets. Citadel Securities, for example, recently urged the SEC to avoid exemptions from securities rules and instead focus on ensuring market liquidity with standard investor protections. Nasdaq’s approach is positioned as a higher standard, requiring equivalence in rights to the underlying stock, in contrast to some overseas platforms that offer tokenized U.S. equities without corresponding shareholder rights.

The initiative reflects a growing interest in tokenization across both traditional finance and the crypto industry. JPMorgan, for instance, has explored tokenized deposits and funds, while Coinbase has reportedly considered integrating tokenized equities into its broader market offerings. With the SEC’s new agenda aiming to foster clearer rules for digital assets, the regulatory environment is increasingly supportive of innovation that aligns with existing market frameworks.