The U.S. Securities and Exchange Commission on Wednesday granted Nasdaq permission to implement a framework that allows some listed securities to be traded and settled as tokenized instruments, according to a regulatory filing. The approval represents a step toward incorporating blockchain-based settlement methods into conventional equity markets.
Under the approved plan, investors would be able to buy and sell certain high-volume stocks either as conventional shares or as digital tokens recorded on a blockchain. Settlements for tokenized trades would be carried out through the Depository Trust Company (DTC), the filing said.
Nasdaq initially proposed the rule change in September, seeking an amendment that would let listed stocks and exchange-traded products trade on its principal market in one of two forms - the traditional share or a tokenized version to be settled on-chain. The SEC approval gives the exchange the regulatory green light to offer that dual structure.
Eligibility for tokenized trading will be limited at launch. The filing specifies that only securities in the Russell 1000 Index and exchange-traded funds that track major benchmarks such as the S&P 500 and the Nasdaq 100 will qualify initially. That scope defines the first group of listings that may use the new tokenized settlement option.
The move follows a broader push by exchange operators to expand into tokenization as regulatory conditions for cryptocurrencies have become more permissive under the current administration. In a related development earlier this year, rival Intercontinental Exchange said it had built a platform for trading and on-chain settlement of tokenized securities and that the NYSE parent is pursuing the necessary regulatory approvals for that project.
Context and mechanics
The SEC approval centers on rule amendments filed by Nasdaq to permit listed equities and exchange-traded products to be offered in either conventional or tokenized form on its main market. Tokenized trades that execute on the blockchain would ultimately settle through the DTC, integrating the new settlement method with existing post-trade infrastructure.
Scope and rollout
- Eligible equities at launch: stocks within the Russell 1000 Index.
- Eligible ETFs at launch: funds tracking major benchmarks such as the S&P 500 and the Nasdaq 100.
- Rival initiatives: Intercontinental Exchange has announced a separate platform for on-chain trading and settlement and is seeking regulatory clearances.