Nasdaq Pushes SEC to Redefine Equity Ownership with Blockchain

Nasdaq Inc., the second-largest stock exchange by market capitalization, is seeking regulatory approval from the U.S. Securities and Exchange Commission (SEC) to trade tokenized versions of stocks and exchange-traded products (ETPs) on its platforms. The proposed rule change aims to integrate blockchain technology into the traditional financial infrastructure, allowing investors to choose between trading assets in conventional or tokenized formats under the same execution and settlement rules. Nasdaq filed the proposal on September 8, 2025, marking a potential turning point in the evolution of U.S. equity markets and the broader adoption of blockchain in financial systems [1].

Under the proposal, tokenized securities would be treated as equivalent to their traditional counterparts, with the same rights, benefits, and identification numbers. This includes voting rights, dividend entitlements, and liquidity privileges. The Depository Trust Company (DTC) would handle the clearing and settlement of tokenized trades once the necessary infrastructure is in place [1]. The exchange emphasized that tokenization would operate within the current regulatory framework, ensuring compliance with investor protection standards and maintaining the integrity of market execution rules [4].

The initiative aligns with a broader shift in the financial industry toward blockchain-based solutions. Traditional financial institutions, such as Citadel Securities and JPMorgan, have expressed cautious interest in tokenization, while crypto-native firms and exchanges like Kraken and Gemini have already begun experimenting with on-chain asset representation [2]. The SEC’s recent focus on clarifying the regulatory boundaries of digital assets adds momentum to the move. SEC Chairman Paul Atkins has described the transition of securities to blockchain as a transformative shift akin to the evolution from analog to digital media, highlighting its potential to reshape issuance, trading, and ownership models [1].

Nasdaq’s proposal is also designed to address concerns about fragmentation and regulatory arbitrage. The exchange warned against the risks posed by overseas platforms that offer tokenized U.S. equities without granting shareholders full rights, potentially undermining market transparency and liquidity [2]. By ensuring tokenized securities are treated equivalently to traditional ones, Nasdaq aims to prevent the emergence of parallel markets with divergent rules and standards. This approach is seen as a safeguard against price dislocation and the erosion of investor trust [3].

The potential approval of the SEC filing would enable U.S. exchanges to list tokenized shares, facilitating deeper liquidity and access for international investors. The move could also support 24/7 trading and faster settlement times, leveraging the capabilities of blockchain networks [5]. However, the initiative is not without challenges. JPMorgan has noted that tokenization has primarily been driven by crypto-forward firms rather than traditional asset managers, suggesting that broader adoption may require further infrastructure development and regulatory clarity [5].

As part of its filing, Nasdaq emphasized the importance of preserving market integrity and transparency while embracing innovation. Chuck Mack, Senior Vice President of North American Markets at Nasdaq, stated that the proposal is intended to offer investors a choice without compromising the stability or fairness of the market. The company will work with stakeholders and regulators to refine the model and ensure it aligns with evolving market needs [3]. The SEC is expected to open a public comment period before making a final decision, allowing for a transparent and collaborative review process [1].

Source: [1] Nasdaq Seeks Nod From U.S. SEC to Tokenize Stocks (https://www.coindesk.com/policy/2025/09/08/nasdaq-seeks-nod-from-u-s-sec-to-tokenize-stocks) [2] Nasdaq seeks SEC nod to trade tokenized securities (https://www.theblock.co/post/369814/nasdaq-seeks-sec-nod-to-trade-tokenized-securities-alongside-traditional-stocks) [3] Q&A: Nasdaq's New Proposal for Tokenized Securities (https://www.nasdaq.com/newsroom/qa-nasdaqs-new-proposal-tokenized-securities) [4] Nasdaq asks SEC for rule change to trade tokenized stocks (https://cointelegraph.com/news/nasdaq-asks-sec-for-rule-change-to-trade-tokenized-stocks) [5] Nasdaq Seeks Rule Change With SEC to Trade Tokenized... (https://www.bloomberg.com/news/articles/2025-09-08/nasdaq-seeks-rule-change-with-sec-to-trade-tokenized-stocks)