Key Takeaways
- Nasdaq received SEC authorization to enable select securities to trade as blockchain tokens
- Digital tokens will appear on identical order books as conventional shares, maintaining price parity and shareholder rights
- Pilot program restricts participation to qualified market participants and covers Russell 1000 constituents plus specific ETFs
- The Depository Trust Company will manage clearing and settlement operations for tokenized transactions
- Nasdaq announced a collaboration with Kraken for worldwide distribution of tokenized securities
The Securities and Exchange Commission granted approval Wednesday for Nasdaq’s application to facilitate trading of certain securities in tokenized format on its platform.
This authorization represents a significant milestone in bringing distributed ledger technology into mainstream American equity markets.
Nasdaq submitted its initial application in September, requesting authorization to operate a pilot initiative in partnership with the Depository Trust Company, which will oversee the clearing and settlement infrastructure for tokenized transactions.
According to the approved framework, qualified market participants may elect to execute trades in either conventional or tokenized formats.
Digital token versions will coexist on the same order book alongside traditional equity shares. These tokenized securities will maintain identical pricing, share the same ticker symbols, and preserve equivalent investor protections and rights.
The pilot program’s scope encompasses securities included in the Russell 1000 Index, representing America’s largest 1,000 publicly traded corporations by market capitalization. Exchange-traded funds that track the S&P 500 and Nasdaq-100 indices also qualify for inclusion.
Regulatory officials determined the framework satisfies investor safeguarding requirements. Existing market surveillance mechanisms, data disclosure obligations, and settlement protocols remain intact.
Tokenization refers to the digital representation of tangible assets as blockchain-based tokens. This technology enables accelerated settlement processes and supports extended trading windows.
During the regulatory review period, the SEC collected stakeholder feedback expressing reservations about market monitoring capabilities and potential price discrepancies between tokenized and traditional share formats. Nasdaq responded by submitting amended documentation with enhanced clarifications.
Nasdaq’s Wider Tokenization Strategy
Earlier in March, Nasdaq revealed a strategic partnership with cryptocurrency platform Kraken to enable clients to convert securities into tokenized instruments on blockchain networks. This collaboration additionally seeks to facilitate direct tokenized share issuance by public corporations.
Intercontinental Exchange, the parent organization of the New York Stock Exchange, has similarly entered this emerging sector. The exchange operator made a strategic investment in cryptocurrency platform OKX in early March, announcing intentions to introduce tokenized equities and cryptocurrency derivatives products.
Regulatory Commentary
SEC Chairman Paul Atkins indicated Tuesday that the commission would shortly solicit public feedback regarding various cryptocurrency-related regulatory exemptions. This encompasses a proposed capital-raising exemption that would authorize certain crypto-adjacent securities to fundraise up to specified amounts during a twelve-month timeframe without formal registration under securities legislation.
The Nasdaq pilot operates concurrently with an expanded DTC initiative designed to evaluate blockchain-powered trade settlement systems throughout U.S. financial markets.
Nasdaq originally submitted its proposal in September 2025. The SEC issued formal approval on March 18, 2026.
Participation remains restricted to qualified market participants exclusively. Involvement in the program is voluntary, with participants retaining discretion to select traditional or tokenized execution methods for individual transactions.
