Nasdaq has asked the U.S. Securities and Exchange Commission (SEC) for a rule change to let the exchange record and offer trading in stocks in tokenized form, according to a filing published Monday. If approved, customers could choose between traditional electronic record-keeping and a blockchain-backed token representation of their holdings.
In its proposal Nasdaq says a participant can mark an order with a tokenization flag on entry; when selected the exchange will pass clearance and settlement instructions to The Depository Trust Company (DTC). Nasdaq frames the option as a user choice — not a mandatory switch away from existing settlement rails.
The move adds to growing interest across markets: Robinhood launched tokenized U.S. stocks on Arbitrum for European users; Kraken partnered with Backed to tokenize stocks on Solana; and pandemic-era Binance and FTX previously offered tokenized stock products. Industry figures including BlackRock’s Larry Fink and Robinhood CEO Vlad Tenev have publicly called tokenization a major capital markets innovation.
Nasdaq told the SEC that the existing regulatory framework mandated by Congress applies to tokenized securities and argued markets can use tokenization while maintaining the benefits and protections of the national market system — likening the shift to past innovations such as decimalization and the arrival of ETFs.
Potential benefits include faster settlement, extended trading hours, programmable securities and new liquidity channels. Key risks include regulatory uncertainty, custody and reconciliation challenges between token and legacy records, operational vulnerabilities, and the possibility of market fragmentation. Those trade-offs will shape how quickly adoption unfolds and how the SEC responds as it reviews the filing.
Source: Decrypt. Read the original coverage for full details.