The U.S. Securities and Exchange Commission (SEC) has approved Nasdaq's rule change to launch a pilot program for tokenized stock trading. This means that eligible securities can be traded and settled for the first time in token form on a blockchain at a major U.S. exchange.
What the Approval Actually Allows
This rule change (SR-NASDAQ-2025-072) establishes a controlled pilot rather than a full market opening. Initially, eligible assets are limited to highly liquid securities, specifically Russell 1000 index components and ETFs tracking the S&P 500 and Nasdaq 100. This scope covers some of the most actively traded instruments in the U.S. market but deliberately excludes smaller or less liquid stocks to avoid additional risks that tokenized settlement might introduce.
Coexistence of Tokenized and Traditional Stocks
The most significant aspect of this approval is the unified trading environment. Tokenized stocks and traditional stocks share the same order book, the same prices, and codes. Buyers trading Russell 1000 components on Nasdaq will not see a separate tokenized market; they will see a single market and can choose the tokenized settlement mechanism.
Tokenized stocks retain the same CUSIP identifiers and enjoy the same shareholder rights as traditional stocks, including voting rights and dividend rights. This equivalence is not superficial; it means that holders of tokenized stocks are not holding derivatives or receipts but are holding the same legal instruments through different settlement infrastructures.
Participants can choose to settle on a blockchain basis within a T+1 cycle, with settlement processed through the Depository Trust Company (DTC). The T+1 timeline aligns with the current standard settlement window for U.S. stocks, meaning that the initial phase of the pilot does not introduce faster settlement. The integration with DTC is a more critical detail. Running tokenized settlements through the existing DTC infrastructure, rather than a separate blockchain system, can reduce counterparty risk and keep the pilot within the existing regulatory framework.
Structural Differences in This Approval
Previous U.S. tokenized asset initiatives operated outside traditional exchange infrastructure in private or permissioned environments. This approval places tokenized stock settlement within Nasdaq's regulated market structure, under direct SEC oversight. This distinction makes it fundamentally different from earlier experiments.
The pilot's scope is designed to be relatively narrow, with Russell 1000 components and major index ETFs being the least controversial starting point. They possess deep liquidity, mature price discovery capabilities, and institutional familiarity. If the settlement mechanism operates smoothly at this level, it will be easier to propose expanding the range of eligible assets to regulators and market participants.