A groundbreaking shift is about to impact stock trading in the United States, as Nasdaq secures approval from the Securities and Exchange Commission (SEC) to process certain stocks and major ETFs as digital tokens. This alignment reflects the finance sector’s increasing pivot towards blockchain technology, with key exchanges and large-scale investors steering the way towards tokenized securities.
What Did the SEC Approve?
Nasdaq has been given the green light by the SEC to initiate tokenized trading for securities in the Russell 1000 Index, which includes many of America’s largest companies. This move also extends to ETFs tracking indices like the S&P 500 and Nasdaq 100. The proposal, initially lodged in September 2025, aims to fuse traditional stock and blockchain-based settlement on Nasdaq’s core platform.
Investors on Nasdaq will soon be able to opt between purchasing equities as standard shares or through digital tokens while remaining compliant with existing regulations. The Depository Trust Company (DTC) will settle these trades, remaining a pivotal player as it processes nearly all stock transactions nationwide.
Will Others Follow Nasdaq’s Path?
The owner of the New York Stock Exchange, Intercontinental Exchange (ICE), is also making strides with its blockchain-centric initiatives. With its on-chain settlement platform now constructed, ICE is seeking the necessary regulatory nod to officially operationalize this innovation. As ICE vies with Nasdaq in this nascent domain, the competition in blockchain settlement intensifies.
Key industry shifts are accelerating the move towards tokenization. U.S. policymakers, including President Donald Trump and SEC Chair Paul Atkins, have prioritized digital advancements to secure a leading role in crypto infrastructure. SEC Commissioner Hester Peirce underscored existing securities laws’ applicability, stressing the necessity for adherence by market entities.
SEC Commissioner Hester Peirce explained the core stance: “Tokenized securities are still securities,” clarifying that regulatory standards will continue to apply regardless of settlement technology.
In collaboration with Payward, the parent company behind Kraken, Nasdaq is pushing the envelope further by establishing an “equities transformation gateway.” This venture signifies a strategic push to embed blockchain solutions deeper into traditional equity markets.
Projections denote that Nasdaq’s first token-settled transactions could occur by Q3 2026’s end, establishing a timeframe for markets to ready their infrastructure and compliance practices.
As more exchanges pursue blockchain-based solutions and with regulatory endorsements now a reality, SEC’s approval represents a critical juncture for tokenization in securities. Increasingly, clients might see tokenized equities as a feasible alternative to conventional methods.
