Nasdaq has filed a new proposal with the U.S. Securities and Exchange Commission (SEC) to enable member firms to trade tokenized versions of equity securities and exchange traded products (ETPs) on its markets.
The filing, submitted on September 8, 2025 (SR‑NASDAQ‑2025‑072), outlines how equities and exchange-traded products (ETPs) may be traded in either traditional digital form or as blockchain-based tokens.
Under the proposal, tokenized securities would trade alongside their traditional counterparts on the same order book, so long as they are fungible, share the same CUSIP identifier, and provide the same material rights—such as voting, dividends, and liquidation claims, according to the filing.
Chuck Mack, Senior Vice President of North American Markets at Nasdaq, explained in an interview with the Nasdaq Newsroom that the goal is to integrate digital assets seamlessly into Nasdaq’s existing architecture. “Our filing provides a simple and clear approach to enable trading of tokenized securities under the existing regulatory framework,” he said, noting that the Depository Trust Company (DTC) would handle the conversion to token form after trade execution.
He described tokenized securities as nothing more than traditional financial instruments recorded on blockchain technology. “They still represent the same store of value as their traditional counterparts,” Mack stated, underscoring that the innovation lies in how ownership is represented, not what is represented.
Blockchain technology has long been discussed as a way to modernize market infrastructure. By recording ownership on distributed ledgers, settlement could be faster, reconciliation more efficient, and record-keeping more transparent. These benefits, Nasdaq argues, can be achieved without compromising the safeguards that underpin the U.S. financial system.
In a public post on LinkedIn, Nasdaq President Tal Cohen called the integration “an exciting leap forward for the global financial system,” pointing to blockchain’s potential to reduce friction and unlock efficiencies without sacrificing market safeguards. He stressed that Nasdaq intends to reinforce the core standards of fairness, resilience, and investor protection even as it modernizes trade infrastructure.
The exchange is cautious to avoid fragmentation or unregulated enclaves of token trading. The filing highlights risks associated with token-like instruments offered in other regions—some of which fail to deliver full shareholder rights or transparency. Nasdaq warns that those platforms can mislead investors and undermine price discovery. In contrast, its proposal ensures that any tokenized security traded on Nasdaq would carry full shareholder rights and be subject to the same surveillance and trade reporting as traditional shares.
Trade mechanics would remain largely unchanged. Market participants would use familiar order types and routing strategies. Selecting the tokenized settlement option—via a flag at order entry—would not alter execution priority. Surveillance protocols, best execution obligations, market data feeds, and Nasdaq’s fee structure would remain identical for all trades, according to the filing.
According to Mack, one of the key drivers behind Nasdaq’s filing is responding to growing market demand for tokenized securities. The technology holds the potential to speed up settlements, improve audit trails, and streamline the flow from order to settlement. Moreover, once equity assets are tokenized, they open opportunities for new uses within financial markets and the broader economy. However, Mack also stressed the importance of embedding governance, resilience, and investor protections from the outset to avoid past market failures and ensure a trustworthy environment for all participants.
Once a tokenized order executes, Nasdaq will relay settlement instructions to DTC, which is building the necessary infrastructure. DTC would then convert the book-entry position into a blockchain token and deliver it to the participant’s digital wallet, managing reconciliation against a reference control account.
Mack emphasized that the U.S. markets are among the deepest and most resilient globally, capable of processing billions of transactions daily. He explained that any new infrastructure must match that level of scale, reliability, and regulatory oversight. The goal, he said, is to give market participants the choice to use tokenized settlement—provided it maintains market integrity.
According to Cohen, instead of creating a separate system, Nasdaq is enhancing the foundation of the current market infrastructure. “Leveraging the strength of our markets today, we are building scalable solutions that unlock the full promise of blockchain innovation for every stakeholder,” he wrote, adding: “We are confident that as an industry, together, we can deliver on the promise of innovative technologies in a manner that benefits all market participants.”
The filing also positions tokenization as an option tailored to market demand. Mack said that when participants express a preference for tokenized settlement—and it can be done without compromising regulatory standards—they want to offer that option. This flexibility, he noted, is made possible without rewriting market rules or eroding protections.
Nasdaq plans to launch trading in tokenized securities once DTC’s blockchain infrastructure is ready and any necessary regulatory approvals are in place. The Exchange has pledged to notify its members at least 30 days before tokenized securities become eligible for trading.
While Nasdaq’s tokenization proposal marks a significant step in market innovation, the exchange has also been advancing other measures to strengthen market integrity.
In addition to the tokenization filing, the Exchange has recently enhanced its listing standards, primarily focusing on improving liquidity and addressing trading concerns for certain microcap companies, according to Mack.
While these developments are separate from the tokenized securities initiative, they reflect Nasdaq’s ongoing efforts to optimize capital markets with investor protections at the core, he said.
“Each of these issues is separate, but they share a common goal: optimizing capital formation while protecting investors and ensuring market integrity,” he concluded.
