The U.S. Securities and Exchange Commission (SEC) has officially approved an innovative pilot program by Nasdaq, allowing the introduction of tokenized securities alongside traditional stock trading. This move marks a milestone for blockchain technology in the U.S. stock market, providing investors with a new platform to trade major U.S. stocks in digital asset form.
Pilot Program Details
Under this approved pilot, participants can choose to trade either standard shares or blockchain-issued tokenized versions of securities within the Russell 1000 Index. Some ETFs tracking the S&P 500 and Nasdaq-100 indices are also included. Both forms of stock will be integrated into the same order book, sharing the same price and stock code, while ensuring that shareholder rights remain unchanged, maintaining a transparent and protected market environment.
Settlement Process and Regulation
The Depository Trust Company (DTC) will be responsible for the clearing and settlement of tokenized stocks. As a leading global securities settlement organization, the DTC will work to facilitate the efficient transfer of assets between financial institutions. Participants can choose to settle trades via blockchain or traditional methods, and must comply with existing regulatory agreements.
Additionally, Nasdaq is collaborating with cryptocurrency exchange Kraken to expand the issuance and trading scale of global tokenized securities. This partnership will allow investors to convert their equity into blockchain tokens and encourage listed companies to explore fundraising through tokenized equity issuance.
The wave of innovation in stock exchanges continues. The parent company of the New York Stock Exchange (NYSE), Intercontinental Exchange (ICE), has also invested in OKX to explore tokenized equity products and derivatives, further highlighting the financial industry's growing interest in the potential of blockchain.
The core of tokenization lies in using blockchain technology to create digital twins of physical assets, which can significantly shorten settlement cycles and potentially enable after-hours trading. Notably, regardless of the form used, all transactions will be subject to the same regulatory scrutiny.
Regulatory Dynamics and Future Outlook
SEC Chairman Paul Atkins has stated that the regulatory body will soon seek public comment on potential new regulatory exemptions for certain crypto-related securities. He emphasized that the SEC is committed to considering new avenues for financing through tokenized assets while still providing adequate investor protection without traditional registration requirements.
This pilot program by Nasdaq is set to begin in September 2025 and received final approval from the SEC in March 2026. This dual approach aims to retain robust regulatory protections while fully leveraging the operational efficiencies of blockchain technology in stock trading.
The pilot project is expected to lay the groundwork for the coexistence of future digital financial instruments and traditional financial tools, further breaking through the current limitations of equity trading.