Key Highlights
- Securities and Exchange Commission has authorized Nasdaq’s initiative to enable blockchain-based token trading for select equities
- Digital tokens representing shares will operate within the identical order book as conventional securities, maintaining price parity and shareholder privileges
- Participation remains restricted to qualified entities, with coverage limited to Russell 1000 constituents and designated exchange-traded funds
- The Depository Trust Company has been designated to manage clearing and settlement operations for tokenized transactions
- A strategic alliance with Kraken will enable worldwide distribution of tokenized securities
On Wednesday, the Securities and Exchange Commission granted approval to Nasdaq’s application for operating a pilot program that permits designated securities to be traded as blockchain-based tokens.
This regulatory authorization represents a significant milestone in merging distributed ledger technology with American equity markets.
The exchange operator initially submitted its application last September, requesting authorization to conduct an experimental program in collaboration with the Depository Trust Company, the designated entity responsible for managing the clearing and settlement infrastructure for digital token trades.
According to the approved framework, qualified market participants will have the option to execute trades using either conventional methods or tokenized alternatives.
Digital share representations will coexist within the same trading infrastructure as traditional equity instruments. These tokenized assets will reflect identical pricing, utilize matching ticker symbols, and preserve equivalent shareholder entitlements.
The experimental program encompasses securities listed within the Russell 1000 Index, representing America’s thousand largest publicly traded corporations measured by market capitalization. Exchange-traded funds that track the S&P 500 and Nasdaq-100 indices have also been incorporated into the program.
Regulatory officials confirmed that the proposed structure satisfies investor safeguarding requirements. Existing market surveillance protocols, data disclosure obligations, and settlement schedules will continue to apply.
Tokenization refers to the technological process of creating blockchain-based digital representations of tangible assets. This innovation enables accelerated settlement cycles and facilitates extended market operating hours.
During the evaluation period, the regulatory agency received commentary expressing apprehensions regarding market oversight capabilities and potential price discrepancies between tokenized and conventional share formats. Nasdaq responded to these concerns by filing supplementary documentation with enhanced specificity.
Nasdaq’s Comprehensive Tokenization Strategy
Earlier in March, Nasdaq revealed a collaborative arrangement with cryptocurrency platform Kraken to provide customers with capabilities to convert securities into tokenized formats on blockchain networks. This strategic partnership additionally seeks to enable publicly traded corporations to create their own digital share tokens.
Intercontinental Exchange, the parent organization of the New York Stock Exchange, has similarly entered this emerging sector. In early March, it made an investment in cryptocurrency platform OKX with intentions to introduce tokenized equity products and digital asset futures contracts.
Regulatory Perspective
SEC Chairman Paul Atkins indicated on Tuesday that the commission would imminently solicit public feedback regarding various cryptocurrency-related regulatory exemptions. This encompasses a proposed capital-raising exemption that would authorize certain digital asset securities to accumulate specified funding amounts during twelve-month intervals without mandatory registration under securities legislation.
The Nasdaq experimental program operates in conjunction with an expanded DTC initiative engineered to evaluate blockchain-powered trade settlement mechanisms throughout American financial markets.
Nasdaq submitted its initial application in September 2025. Regulatory approval was granted on March 18, 2026.
Participation remains exclusively available to qualified entities. Involvement in the pilot program is voluntary, and participants retain discretion to select between conventional or tokenized execution methods for individual transactions.
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