The US Securities and Exchange Commission (SEC) on Wednesday approved Nasdaq’s proposal to allow certain securities to trade in tokenized form, a key milestone for integrating blockchain technology into US stock markets.
Nasdaq’s tokenization plan is linked to a pilot run by the Depository Trust Company (DTC), which will handle the clearing and settlement of tokenized trades. Nasdaq requested regulatory approval in September,
Under the framework, eligible Nasdaq participants can choose to have trades settled as blockchain-based tokens rather than through standard bookkeeping systems.
Tokenized shares will trade alongside traditional shares in the same order book and at the same price. They have identical rights, use the same ticker and CUSIP (identification number) and follow existing market rules.
The SEC said the structure meets investor protection standards and noted that monitoring, data reporting and settlement timelines remain intact.
The move comes as tokenization of traditional assets such as stocks, bonds and funds has become a fast-growing sector in the digital asset space. The process allows near-instantaneous 24/7 trading of tokens tied to real assets.
The trend has caught major US stock exchanges. Nasdaq said last week that it is developing a framework that will allow listed companies to issue blockchain-based versions of their shares. It has partnered with crypto exchange Kraken to distribute tokenized shares globally. Meanwhile, Intercontinental Exchange (ICE), the owner of the NYSE, invested in the crypto exchange OKX with plans to launch new tokenized stocks and crypto futures.
Read more: Here’s why Nasdaq and NYSE owner are putting $126 trillion stock market on blockchain
