The U.S. Securities and Exchange Commission (SEC) has approved a Nasdaq rule change, clearing the path for the trading of tokenized securities on the exchange. This approval, issued on March 18, 2026 (File No. 34-105047), marks a significant milestone in the integration of blockchain infrastructure with traditional equity markets.
The SEC's approval letter pertains to Nasdaq's proposed rule change (SR-NASDAQ-2025-072, as modified by Amendment No. 2), which permits eligible securities to be traded in tokenized form on Nasdaq through a pilot program operated by the Depository Trust Company (DTC).
Key Aspects of the Approval
Under the approved framework, tokenized stocks will be legally equivalent to their traditional counterparts. They will share the same CUSIP, the same ticker symbol, and the same shareholder rights and privileges as traditional stocks. Tokenized and traditional stocks will trade on the same order book and be subject to the same market surveillance and structural controls. The settlement process will continue on a T+1 basis, facilitated by DTC, rather than establishing a separate, parallel system.
Initially, the scope of eligible securities will be limited to constituents of the Russell 1000 index, as well as specific ETFs that track major indices such as the S&P 500 and the Nasdaq 100. This approval does not represent a blanket authorization for all tokenized stocks.
Convergence of Crypto and Capital Markets
Tokenized securities are digital representations of traditional financial instruments built on blockchain technology. Unlike standalone crypto tokens, they will be fully subject to U.S. federal securities laws, a point repeatedly emphasized by the SEC recently.
Nasdaq's permission to handle tokenized trading signifies that the concept has moved beyond crypto-specific platforms and into regulated market infrastructure. The SEC found the proposal consistent with Section 6(b)(5) of the Securities Exchange Act, which requires exchange rules to protect investors and promote fair dealing.
Tal Cohen, Executive Vice President at Nasdaq, has previously elaborated on the initiative, stating, "The convergence of tokenization with traditional markets presents a remarkable opportunity."
This approval builds upon two prior SEC actions. In December 2025, the SEC issued a no-action letter allowing DTC to develop an initial tokenized service for eligible securities. Subsequently, in January 2026, SEC staff issued a statement clarifying that tokenized securities are subject to federal laws in the same manner as traditional securities.
Considerations for Traders, Issuers, and Platforms
Several practical considerations remain to be addressed. Before any tokenized trades can be executed, DTC must complete the build-out of its settlement infrastructure. Until then, the rule change, while approved on paper, remains dormant in practice. Market participants will need clarity on the specific timeline for launch and which securities will be included in the initial trading.