Nasdaq pushes

# Nasdaq Files Proposal with SEC to Allow Trading of Tokenized Securities on Major Markets

On Monday, Nasdaq submitted a proposal to the U.S. Securities and Exchange Commission (SEC), seeking permission to allow the trading of tokenized securities on its major markets. If approved, this move will mark the first time blockchain technology is integrated into the core of the U.S. financial system. The proposal comes at a time of changing regulatory environment in the U.S., and Nasdaq plans to integrate this technology within the existing framework to ensure that tokenized securities enjoy the same rights as traditional securities.

Written by: Zhang Yaqi  

Source: Wall Street CN  

Nasdaq is pushing for the introduction of tokenized securities trading on major U.S. exchanges. If approved, this initiative will signify the first integration of blockchain technology into the core of the U.S. national market system, potentially reshaping the way securities are traded and settled.

On Monday this week, Nasdaq filed a rule change proposal with the U.S. Securities and Exchange Commission (SEC), aiming to allow listed stocks and exchange-traded products (ETPs) on its mainstream markets to be traded in "traditional digital or tokenized forms." This represents the most significant attempt by an exchange operator to date to introduce blockchain-based settlement into the national market system.

This move follows closely on the heels of the SEC’s recently released rulemaking agenda, which indicates that the regulator is considering revising rules to permit the trading of crypto assets on national securities exchanges and alternative trading systems (ATS). Against the backdrop of the Trump administration’s somewhat relaxed stance on cryptocurrency regulation, Nasdaq’s proposal is seen as a key step by mainstream Wall Street financial institutions to increase their involvement in the wave of asset tokenization.

If the proposal is approved, it will be the first time tokenized securities are allowed to trade on major U.S. stock exchanges. This move reflects the growing demand for tokenized assets among institutional investors, and industry proponents argue that tokenization can significantly enhance the liquidity and efficiency of the financial system.

## Nasdaq’s Proposal: Seeking to Embed Tokenization Technology into the Existing Market Framework

In its proposal, Nasdaq emphasizes that its plan aims to integrate tokenization technology into the existing market framework rather than upend it. Nasdaq stated in the document:

"We believe the market can leverage tokenization while continuing to provide the benefits and protections of the national market system."

It argues that "a full exemption from the national market system and related protections is neither necessary to achieve the goals of tokenization nor in the best interests of investors."

The proposal echoes previous remarks by SEC Commissioner Hester Peirce that tokenized securities cannot circumvent existing securities laws. Nasdaq notes that its plan is structured within this legal framework.

To safeguard investor interests, Nasdaq intends to set high standards for tokenized securities, requiring them to have "the same material rights and privileges as traditional securities of the same class." If these conditions are met, tokenized securities will trade "on the same order book and subject to the same execution priority rules" as traditional securities. Nasdaq explicitly states that if a tokenized instrument does not possess equivalent rights, it will be treated as a distinct instrument.

## Loosened Regulation Paves the Way

According to Nasdaq’s vision, if the proposal is approved and the infrastructure of central clearing institutions is in place, investors will be able to purchase a stock on Nasdaq and settle the transaction in tokenized form, without any changes to the way orders are routed, priced, monitored, or reported.

Nasdaq estimates that, assuming the infrastructure of the Depository Trust Company (DTC) is ready by then, U.S. investors could see the first token-settled securities trades as early as the end of the third quarter of 2026.

Nasdaq’s proposal comes at a delicate moment when the U.S. regulatory environment is undergoing changes. Under the leadership of newly appointed Chairman Paul Atkins, the SEC is seeking to adjust cryptocurrency-related regulations and reduce rules that have long been criticized by Wall Street as "excessively burdensome."

Just days before Nasdaq submitted its proposal, the SEC released its agenda, which included potential rule changes to facilitate the trading of crypto assets on national exchanges. If these policies are implemented, it will be a major victory for the digital asset industry, which has long called for more adaptive rules, and will help further integrate crypto assets with traditional finance.

Marcin Kazmierczak, co-founder of RedStone, stated that he believes the conditions for large-scale application of tokenization are largely in place, thanks primarily to a more favorable regulatory environment, advancements in blockchain technology, and growing interest in tokenization projects among institutional investors.

## Opportunities and Challenges Coexist

Asset tokenization generally refers to the process of converting financial assets such as stocks, bonds, funds, and even real estate into crypto assets. Tal Cohen, President of Nasdaq, said on his LinkedIn page that combining tokenization with traditional markets offers "extraordinary opportunities to accelerate trade settlement, automate processes, and improve efficiency."

However, not everyone is optimistic about this trend. A May report by the World Economic Forum pointed out that insufficient secondary market liquidity and the lack of clear global standards are the two main challenges to the widespread adoption of tokenization. The World Federation of Exchanges has also expressed concerns and called on regulators to curb the frenzy surrounding tokenization.

Critics warn that in the absence of strict regulation, tokenization may introduce new systemic risks. Some major global banks, including Bank of America and Citigroup, have indicated that they may explore launching tokenized assets, including stablecoins.

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