Nasdaq’s Stock Tokenization Request

Nasdaq wants to plug blockchain-based settlement into the existing U.S. equity market structure, without changing what a share is, how trading works, or what protections investors have. If the SEC approves it, this would be the first time truly tokenized securities trade on a major U.S. exchange, fully inside the National Market System. That makes this filing one of the key milestones in the institutional tokenization story.

What Nasdaq is asking for

Nasdaq has filed a rule change (a Form 19b-4) with the SEC. The idea is to keep the trading exactly as it is today, but give market participants the option to settle certain Nasdaq-listed stocks and ETFs in the form of blockchain-based tokens, instead of only through traditional book-entry at the central securities depository.

For Nasdaq to treat a tokenized position as the same security, it must share the same identifier and carry the same material rights and privileges as the traditional share: voting, dividends, corporate actions, everything. If that parity is broken, it stops being “the same stock” in Nasdaq’s eyes and becomes a different instrument (further below we explain how exactly this is relevant).

No changes to trading

To understand the impact, it helps to walk through what would change and what would not.

From the investor’s perspective, almost nothing in the trading workflow changes. An investor still sends an order to their broker. The broker still routes that order to Nasdaq’s order book as every other order for that security, interacting with the same quotes and following the same best-execution rules.

The novelty comes when the broker submits the order. It can indicate whether the resulting trade should settle in the traditional way, or in tokenized form. Crucially, this choice does not split the market into two pools. A buy order tagged for tokenized settlement can match a sell order tagged for conventional settlement. The matching logic, price formation, and market data are the same as today. Tokenization lives entirely in the post-trade layer.

Once a trade is executed, Nasdaq passes the settlement preference to the Depository Trust Company (DTC), the U.S. central securities depository. DTC then records the position. For a traditional trade, it uses its existing book-entry system. For a tokenized trade, it uses new blockchain infrastructure to represent the security as a token on-chain.

Exactly how that token layer looks, what chain is used, how the smart contracts are structured, whether positions are represented in omnibus wallets per broker or in more granular form, has not been fully disclosed. What is clear is that DTC remains the ultimate source of truth. The blockchain is an additional record, not a replacement for the CSD.

Therefore, the tokens are not loose bearer assets that anyone can send to anyone. They are on-chain records of regulated securities positions, inside a system that is still accessed through registered intermediaries: brokers, custodians, and other regulated participants. Trading stays within the regulated framework; the technology under the hood changes.

Trading hours also remain the same. Tokenization does not automatically create 24/7 trading. If Nasdaq ever moves its main market toward 24-hour sessions, that would be a separate policy decision, not a by-product of this filing.

What we know and what we don’t

A few things are reasonably clear.

We know the scope: Nasdaq-listed equities and ETPs. We know the principle of legal equivalence: for tokenized positions to be treated as the same security, they must share the same identifier and the same rights as the traditional shares. We know that DTC is the one building and operating the blockchain-based settlement layer, and that trading remains fully subject to existing U.S. securities law and National Market System rules.

We also know that Nasdaq explicitly highlights the use of public blockchains as a way to provide a transparent, auditable trail of tokenized settlement. That is a notable shift in tone for mainstream U.S. market infrastructure.
What we do not yet know is which blockchain or blockchains DTC will use, what token standard they will adopt, how wallets and accounts will be structured, or whether any part of this will eventually be accessible beyond a walled garden of regulated entities. We also do not know what additional conditions, if any, the SEC will impose around cybersecurity, resilience, or custody.

The full picture will be available once DTC publishes more technical details and the SEC responds to the filing.

How this differs from already tokenized stocks

Today, several crypto and fintech platforms offer tokenized versions of flagship U.S. stocks (Tesla, Apple, etc). These products usually mirror the price of a stock, but they are often just contractual claims on shares held somewhere by a partner entity. In most cases, the buyer does not receive full shareholder status: no direct voting rights, unclear or synthetic dividends, and limited clarity on what happens if something goes wrong.

Regulators, especially in Europe, have already warned that such instruments can mislead investors, because they look like stocks but do not confer the legal rights of stock ownership.

Nasdaq’s proposal is intended to represent the actual listed security, not a derivative or CFD. The rights attached to the tokenized position must match those of the traditional share. Trading happens on a major U.S. exchange, under the SEC’s eye, inside the National Market System. Settlement is handled by DTC, the recognized central depository. Blockchain technology is used to enhance transparency and efficiency within that regulated environment, not to bypass it.

In other words: this is tokenization of real securities, fully inside the regulatory perimeter, not a parallel crypto product that lives outside it.

Why this matters for market structure

Because tokenization is implemented as a settlement option rather than as a separate instrument, it preserves unified liquidity. There is still a single order book per security, a single price formation process, and a single best-bid / best-offer structure. If the SEC approves the filing, other exchanges will have a choice: adopt similar models, propose alternatives, or risk being seen as lagging on infrastructure modernization. NYSE, Cboe, and major non-U.S. exchanges will study Nasdaq’s approach closely.

The existence of a regulated, rights-bearing tokenized equity on a major exchange also changes the reference point for offshore tokenized-stock platforms. Once there is a clearly regulated, legally robust way to hold tokenized exposure to U.S. stocks, the argument for unregulated synthetic stock tokens becomes weaker—and regulatory pressure on those products is likely to increase.

First step towards tokenizing Central Securities Depositories

Tokenized positions that live on-chain in a highly auditable way are easier to see, track, and potentially pledge as collateral in on-chain or hybrid collateral systems. For institutions, this can improve collateral mobility and intraday liquidity management, assuming CCPs and regulators are comfortable with the risk models.
But structurally, what Nasdaq and DTC are proposing is to make the core plumbing of equity settlement more flexible and programmable, without changing who is allowed to use it or under what rules.

For DTC and other CSDs globally, this is a strategic move. It positions DTC as a central tokenization provider for U.S. listed equities and sets a pattern that other CSDs may follow: use blockchain to enhance the existing centralized infrastructure, rather than to replace it.