- Nasdaq filed a SEC proposal that will allow tokenized stocks to trade alongside traditional shares on the same exchange order book.
- The plan aims to introduce blockchain settlement via DTC while keeping existing trading rules and market structure completely unchanged.
- Nasdaq will reject synthetic stock tokens and will require full fungibility, identical rights, and the same CUSIP for confirmation as real shares.
Nasdaq Tokenized Stocks discussions headlines U.S. equity markets. In the meantime, the Nasdaq Composite is around 23,515, and the Nasdaq‑100 is near 25,529, reflecting ongoing volatility in tech shares.
Nasdaq has filed a proposed rule change with the SEC to allow tokenized versions of listed stocks and ETPs trade alongside traditional equities.
The initiative will hold existing trading mechanics intact while introducing blockchain‑based settlement through regulated infrastructure.
Under the proposal, tokenized shares must meet strict criteria, including full fungibility and identical rights as conventional shares, to qualify.
If approved, this will mark a major step for integrating distributed ledger technology into the mainstream U.S. equity markets.
Regulatory Framework and Security Definition
Nasdaq Tokenized Stocks stem from a September 2025 rule filing submitted to the U.S. Securities and Exchange Commission. The filing proposes amendments allowing Nasdaq-listed equities and exchange-traded products to exist in tokenized form.
These tokenized instruments would remain securities under U.S. law. The proposal expands Nasdaq’s definition of a security to explicitly include blockchain-based representations.
Tokenized shares must be fully fungible with traditional book-entry shares. They must also carry the same CUSIP identifier and identical shareholder rights.
WuBlockchain reported that Nasdaq rejects non-equivalent token models common on offshore platforms. Instruments lacking voting rights or direct shareholder claims would not qualify.
Such products would instead be treated as derivatives or other financial instruments.
This structure aims to prevent parallel markets from forming.
Nasdaq positions tokenization as an extension of existing records rather than a replacement for regulated equities. The filing reinforces continuity within the national market system.
Trading Integration and Post-Trade Processing
The Tokenized Stocks will trade through the same matching engine as traditional shares. At execution, the system will not distinguish between tokenized and non-tokenized orders.
Price discovery and liquidity would remain unified within one order book. Settlement introduces the primary operational change.
Broker-dealers may choose blockchain settlement when submitting orders. If selected, settlement instructions are routed to the Depository Trust Company after execution.
DTC would process settlement using its distributed ledger platform developed under Project Ion. Ownership records would be updated on-chain within a permissioned network.
The process supports delivery-versus-payment while reducing settlement delays. WuBlockchain noted that Nasdaq does not plan to launch a separate blockchain exchange.
Existing market surveillance and risk controls would continue to apply. Tokenization operates behind the scenes rather than altering front-end trading behavior.
Trading Hours and Infrastructure Readiness
Nasdaq Tokenized Stocks would follow current U.S. equity trading hours. The proposal does not allow continuous or weekend trading.
Pre-market and after-hours sessions would remain consistent with existing Nasdaq schedules. This limitation addresses liquidity concerns seen in offshore tokenized stock markets.
Confining trading to regulated hours helps maintain price alignment with traditional equities. It also supports market maker participation and orderly trading conditions.
The blockchain infrastructure supporting settlement would operate within a controlled consortium environment. DTCC and affiliated institutions would manage network access.
Public blockchain explorers would not display ownership records. According to WuBlockchain, Nasdaq expects infrastructure readiness by late Q3 2026. Because regulatory approval and system testing reflect a transition.
Nasdaq Tokenized Stocks represent a structured effort to modernize equity settlement. The proposal integrates blockchain technology while preserving legal clarity, liquidity concentration, and regulatory oversight across U.S. equity markets.