US Stock Market: SEC greenlights Nasdaq’s tokenized trading push, bringing blockchain to Wall Street

In a development that could reshape the plumbing of equity markets, the U.S. Securities and Exchange Commission (SEC) has approved a proposal by Nasdaq to enable trading and settlement of select stocks in tokenized form, according to a regulatory filing reported by Reuters. The move signals a growing convergence between traditional financial markets and blockchain-based infrastructure.

The approval allows investors to trade certain high-volume stocks either as conventional shares or as digital tokens representing those shares. These tokenized securities will still be settled through the Depository Trust Company, ensuring continuity with existing post-trade systems while introducing a layer of blockchain-enabled efficiency, Reuters reported.

The decision reflects a broader push by exchange operators to tap into the rising interest in tokenization. As regulatory conditions for cryptocurrencies have become more accommodative in recent years, market infrastructure providers have accelerated efforts to modernize trading and settlement processes using distributed ledger technology, according to Reuters.


Nasdaq had originally submitted the proposal in September, seeking amendments that would permit listed equities and exchange-traded products to be traded in both traditional and tokenized formats on its primary market. With regulatory approval now in place, the exchange can begin implementing this dual-format trading model, Reuters said.

In the initial phase, eligibility for tokenized trading will be restricted to a defined universe of securities. These include stocks that are part of the Russell 1000 Index, along with exchange-traded funds that track widely followed benchmarks such as the S&P 500 and the Nasdaq 100, as outlined in the filing cited by Reuters.

The development also highlights intensifying competition among exchange groups to lead in next-generation market infrastructure. Intercontinental Exchange, the parent company of the New York Stock Exchange, has already built a platform designed for trading and on-chain settlement of tokenized securities and is currently pursuing the necessary regulatory approvals, Reuters reported.

Market participants view tokenization as a potential game changer, offering benefits such as faster settlement times, improved transparency, and reduced operational costs. By enabling digital representations of traditional securities, exchanges aim to bridge the gap between legacy financial systems and emerging blockchain ecosystems.

While the rollout will be gradual and closely watched by regulators and investors alike, the SEC’s approval marks a significant milestone in the evolution of capital markets. As tokenization moves from concept to implementation, it could redefine how assets are traded, settled, and owned in the years ahead.