On Wednesday, the U.S. Securities and Exchange Commission (SEC) approved Nasdaq’s pilot proposal to support the trading of tokenized versions of stocks and other securities on the electronic exchange.
According to a filing, eligible participants will be able to settle trades in tokenized form during a pilot program operated by the market infrastructure firm Depository Trust Company – a subsidiary of DTCC. Nasdaq first filed a proposal in September 2025 to allow trades in high-volume stocks in either traditional or tokenized form on the same exchange.
SEC Approves Rule Change to Allow Nasdaq’s Tokenized Stock Trading Pilot
The SEC also made a rule change that allows participants in the pilot to opt to have stock trades settled in tokenized form, with the equities sharing the same order book, price, ticker, and identifying number as their traditional counterparts. Tokenized shares must also carry the same rights and privileges as a regularly traded equity.
However, the securities watchdog has limited the tokenized stock options to those that trade in the Russell 1000 Index and exchange-traded funds (ETFs) tracking the S&P 500 and Nasdaq-100 indices.
Under the leadership of Chairman Paul Atkins, the SEC has begun advancing crypto-related rulemaking, aligning with the Trump administration’s efforts to make America the “Crypto Capital of the World.” The agency has generally taken a cautious approach, emphasizing that tokenized securities remain subject to existing federal securities laws.
The move to allow tokenized representations of traditional equities to trade on a major U.S. exchange represents a significant and practical step toward bringing traditional market infrastructure on-chain. However, until now, most tokenized stock offerings were only available to non-U.S. investors on platforms seeking to give crypto users exposure to companies like Tesla (TSLA), Nvidia (NVDA), and Apple (APPL).
Leading U.S. Exchanges Partner with Crypto Firms to Explore Tokenized Securities
The SEC approval comes weeks after Nasdaq announced a partnership with leading global crypto exchange Kraken to allow its clients to convert their securities holdings into tokenized versions that can be used across blockchains and to allow companies to create and issue their own tokenized shares.
Meanwhile, the New York Stock Exchange (NYSE) parent, the Intercontinental Exchange (ICE), has also set its sights on tokenization, investing in crypto exchange OKX in early March to launch tokenized stocks. Separately, the NYSE is exploring the possibility of extending trading hours to support trading and settling of tokenized equities. In December, the regulator authorized the DTCC to pilot the tokenization of certain assets on approved blockchains.
On Tuesday, Atkins said the SEC is seeking public comment in the coming weeks on a range of crypto-related exemptions, including a fundraising exemption to allow some securities involving crypto assets to raise a set amount in any 12 months while being exempted from securities laws.
“I really feel strongly that we need to have that firm foundation, give people certitude, attract people back here to the United States, work on innovative products for investors, and to make our financial system more efficient and less risky,” Atkins said.
