Nasdaq Receives SEC Approval to Launch Blockchain-Based Stock Tokens

Key Points

• Nasdaq received SEC authorization to offer blockchain-based tokenized versions of select securities
• Both tokenized and conventional shares will exist on a unified order book with identical pricing and investor protections
• Participation is restricted to qualified entities, with coverage limited to Russell 1000 constituents and select ETFs
• Settlement and clearing operations for tokenized transactions will be managed by the Depository Trust Company
• A strategic alliance with Kraken aims to enable worldwide distribution of tokenized securities

On Wednesday, the Securities and Exchange Commission granted approval to Nasdaq’s request to operate a pilot program enabling select securities to trade as tokenized instruments on its platform.

This regulatory decision represents a meaningful advancement in bringing blockchain infrastructure into mainstream U.S. equity markets.

The exchange initially submitted its proposal last September, requesting authorization to collaborate with the Depository Trust Company on a pilot initiative. The DTC will oversee the clearing and settlement processes for these blockchain-based transactions.

The approved framework permits qualified participants to select between conventional trading methods and tokenized alternatives for eligible securities.

Tokenized instruments will operate within the same trading infrastructure as their traditional counterparts. They’ll maintain price parity, share identical ticker symbols, and preserve all shareholder privileges.

The program’s scope encompasses securities within the Russell 1000 Index, representing America’s largest 1,000 publicly traded corporations by market capitalization. Exchange-traded funds that track the S&P 500 and Nasdaq-100 indices also qualify for inclusion.

According to the SEC, this framework satisfies regulatory requirements for investor safeguards. Existing surveillance mechanisms, reporting obligations, and settlement protocols continue to apply.

Tokenization involves creating blockchain-based digital representations of tangible assets. This technology enables accelerated settlement processes and can facilitate extended trading windows.

During the review period, the SEC collected stakeholder input highlighting potential issues around market monitoring capabilities and the possibility of price discrepancies between tokenized and traditional formats. Nasdaq responded by filing an amended proposal with enhanced specifications.

Expanding Tokenization Initiatives

Earlier in the month, Nasdaq revealed a collaboration with cryptocurrency platform Kraken designed to enable clients to convert securities into blockchain-based tokens. This strategic partnership also envisions empowering publicly traded companies to issue tokenized versions of their equity.

Intercontinental Exchange, the parent organization of the New York Stock Exchange, has similarly entered this emerging market. In early March, it made an investment in cryptocurrency platform OKX with intentions to introduce tokenized equity products and cryptocurrency derivatives.

Regulatory Perspective

SEC Chairman Paul Atkins indicated on Tuesday that the commission would shortly solicit public feedback on various cryptocurrency-related regulatory exemptions. This includes a potential fundraising exemption that could permit certain crypto-adjacent securities to raise specified capital amounts within twelve-month intervals without formal registration under securities regulations.

The Nasdaq initiative operates in conjunction with a comprehensive DTC program established to evaluate blockchain-powered settlement mechanisms throughout U.S. financial markets.

Nasdaq submitted its initial application in September 2025. The SEC granted approval on March 18, 2026.

Only authorized participants may engage in the pilot program. Involvement is voluntary, and participants retain the flexibility to choose between traditional and tokenized execution methods for individual transactions.

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