Nasdaq Seeks SEC Approval to Trade Tokenized Stocks Alongside Traditional Shares

Highlights:

• Nasdaq has filed with the regulatory body to amend rules on tokenized shares.
• Nasdaq is seeking the approval of the SEC to expand oversight and address risks from unregulated platforms.
• Nasdaq projects tokenized settlement by Q3 2026 as lawmakers draft standards for custody audits and reporting.

Nasdaq, a global technology company, filed a request with the US SEC to gain approval for trading tokenized stocks on its exchange. The filing seeks a rule change that includes an updated definition of securities to cover tokenized versions. Tokenized equities, according to Nasdaq, should adhere to the same documentation and execution rules that govern traditional shares. The exchange contended that tokenized and traditional securities need to remain equal in accordance with the rules of the market.

BREAKING: 🇺🇸 NASDAQ FILES WITH U.S. SEC TO ENABLE TRADING OF STOCKS IN TOKENIZED FORM.

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— Ash Crypto (@Ashcryptoreal) September 8, 2025

Nasdaq stated that tokenized stocks represent the right of ownership using blockchain technology. Meanwhile, traditional digital shares do not use distributed ledgers. Nasdaq also proposed that clear labeling of tokenized assets be provided so that the clearinghouses and settlement services, like the Depository Trust Company, can process trades without confusion.

If the SEC accepts the request, US exchanges could begin listing tokenized versions of listed stocks and exchange-traded funds. Nasdaq highlighted that this change would open access to blockchain settlement while keeping protections equal.

Nasdaq Seeks SEC Approval to Expand Oversight of Tokenized Securities

Nasdaq argued that tokenized securities must trade within regulated markets and not on unregulated venues. The exchange raised concerns that isolated trading platforms create risks because they do not show investors the full market picture. Nasdaq said that such platforms prevent users from accessing the best available prices across the market system. It stressed that tokenized assets should remain under the structure of national securities exchanges.

The company also said that Congress intended securities to trade through national exchanges, alternative trading systems, and broker-dealers registered with the Financial Industry Regulatory Authority. Nasdaq described these markets as critical for protecting investors and preserving market integrity. It warned that trading outside these frameworks exposes investors to gaps in transparency and rights.

Nasdaq also expressed concern about European platforms offering tokenized US equities. The exchange said these platforms give investors digital rights instead of full ownership of shares. Nasdaq noted that these rights do not include shareholder privileges such as voting powers. This distinction creates risks for investors who expect full equity ownership.

Interest in tokenization is rising among global institutions. Citadel Securities submitted views on investor protections in tokenization. Coinbase explored tokenized equities as part of its platform expansion. Banks such as JPMorgan and Citi studied tokenized funds and deposits. Meanwhile, Kraken recently met with the SEC to discuss tokenized trading.

Kraken recently met with the SEC's crypto task force to discuss the future of tokenization. This discussion comes amid increasing calls from global regulators and traditional exchange groups for the SEC to strengthen oversight of tokenized stocks. The outcome of these…

— Polaris Advisory (@polarisadvisory) August 31, 2025

Timeline Legislative Efforts and Market Outlook

Tokenized settlement, according to Nasdaq, may begin in the third quarter of next year, subject to SEC clearance. The timeline depends on the readiness of the Depository Trust Company to support blockchain-based clearing. The company said trades would settle on-chain as soon as clearing systems can integrate distributed ledgers with existing processes.

The proposal also fits within the SEC agenda, which includes discussions on digital assets and tokenized products. Efforts to create auditable rules for tokenized assets and reporting on custody are being considered by lawmakers in Washington.