The U.S. Securities and Exchange Commission (SEC) gave its approval on Wednesday to a Nasdaq proposal. This decision allows certain stocks to be traded and settled using a tokenized form, moving closer to bringing blockchain-based settlements into regular stock markets.
Exchange operators have been pushing hard to benefit from the rise of “tokenization.” This trend is gaining momentum as cryptocurrency regulations become less strict under the Trump administration.
This new development means investors can now trade high-volume stocks either as traditional shares or as digital tokens built on blockchain technology. These tokenized trades will be settled through the Depository Trust Company.
Nasdaq first submitted its proposal to the SEC in September. It asked for changes to its rules to permit listed stocks and exchange-traded products to trade on its main market in either their traditional or tokenized forms.
Initially, only certain securities will be eligible for tokenized trading. These include stocks from the Russell 1000 Index and exchange-traded funds (ETFs) that track major indexes like the S&P 500 and the Nasdaq 100.
Nasdaq isn’t alone in this effort. Rival company Intercontinental Exchange, which owns the NYSE, also announced earlier this year that it developed its own platform. This platform is designed for trading and settling tokenized securities directly on a blockchain, and it is currently seeking regulatory approvals.
This approval from the SEC for Nasdaq marks a significant step. It shows a growing acceptance of blockchain technology within traditional financial systems. It could pave the way for more efficient and faster settlement processes for a broader range of financial assets in the future. The integration of digital tokens into mainstream markets could reshape how investments are managed and traded.
