Nasdaq Gets SEC Green Light to Trade and Settle Stocks as Tokenized Securities

TLDR:

• SEC approved Nasdaq’s proposal to allow Russell 1000 stocks and major ETFs to trade in tokenized form.
• Tokenized trades on Nasdaq will still settle through the Depository Trust Company under existing securities laws.
• ICE, the parent of NYSE, is also developing an on-chain settlement platform and awaiting its own regulatory approval.
• First token-settled trades on Nasdaq are expected to take place before the close of the third quarter of 2026.

Tokenized securities are now moving closer to mainstream equity markets after a landmark U.S. SEC ruling. The Securities and Exchange Commission approved a Nasdaq proposal on Wednesday to allow stocks to trade in tokenized form.

Nasdaq, listed as NDAQ, had submitted the original proposal in September 2025. The decision marks a concrete step toward integrating blockchain-based settlements into traditional equity trading.

Exchange operators across the industry have been racing to capitalize on the growing tokenization boom under easing crypto regulations.

Nasdaq Sets the Framework for Eligible Tokenized Securities

The SEC approval covers a defined set of securities eligible for tokenized trading on Nasdaq’s main market. Initially, stocks within the Russell 1000 Index will qualify for tokenized trading under the newly approved rules.

Exchange-traded funds tracking key benchmarks, including the S&P 500 and Nasdaq 100, are also covered under the approval.

Journalist Eleanor Terrett captured the scope of the ruling clearly on X, writing that “the move will allow participants to opt to have trades in Russell 1000 stocks, as well as ETFs tracking the S&P 500 and Nasdaq 100, settled as tokenized securities rather than through traditional methods.”

Furthermore, investors will be able to choose between trading stocks as conventional shares or as blockchain-based digital tokens.

Settlement for all tokenized trades will run through the Depository Trust Company, a familiar and established institution.

The original proposal, filed in September 2025, sought to amend Nasdaq’s existing rules to support both traditional and tokenized trading on its primary market.

The first token-settled trades are potentially expected to occur by the end of the third quarter of 2026. The SEC’s approval of that amendment now makes tokenized equity trading a functional option for a broad range of investors.

Rival Exchanges Are Also Pursuing Blockchain-Based Settlement

Intercontinental Exchange, the NYSE parent listed as ICE, has similarly moved into this space in 2025. Earlier this year, ICE announced it had developed a dedicated platform for trading and on-chain settlement of tokenized securities. The company is currently pursuing the necessary regulatory approvals to bring that platform to market.

The broader push toward tokenization is being driven in part by easing crypto regulations across the United States.

The Trump administration and SEC Chairman Paul Atkins have placed strong emphasis on strengthening American leadership in digital financial technology and making the country the leading hub for crypto globally.

SEC Commissioner Hester Peirce has also been vocal on the matter, stating that “tokenized securities are still securities” and that market participants must fully adhere to federal securities laws when trading these instruments.

The competition between Nasdaq and ICE reflects how aggressively traditional finance is embracing tokenized markets.

Nasdaq has also partnered with Kraken’s parent company, Payward, to develop an “equities transformation gateway,” further extending its blockchain reach beyond the SEC ruling.

This parallel development across rival exchanges points to on-chain equity settlement gaining genuine and lasting industry-wide traction.

The post Nasdaq Gets SEC Green Light to Trade and Settle Stocks as Tokenized Securities appeared first on Blockonomi.