- SEC approved Nasdaq rule change to allow trading and settlement of tokenized shares
- Initial eligibility limited to Russell 1000 constituents and major index ETFs
- Settlement will continue through the Depository Trust Company
- ICE and other exchanges are pursuing tokenized securities platforms
The U.S. Securities and Exchange Commission (SEC) has approved a Nasdaq proposal allowing eligible stocks to be traded and settled as blockchain-based tokens, a decision that plants digital asset infrastructure firmly within the architecture of American equity markets.
The SEC’s March 18 ruling clears Nasdaq to build a platform that allows securities to exist in two parallel forms: conventional shares traded through existing channels and tokenized versions settled via the Depository Trust Company. Companies in the Russell 1000 Index are included in the initial eligible pool, alongside exchange-traded funds tracking major benchmarks such as the S&P 500 and the Nasdaq 100.
A Regulatory Green Light, Not a Technology Endorsement
Nasdaq first filed the rule change with its exchange listing board last September, arguing that tokenized securities could operate alongside their traditional equivalents provided the underlying clearing and settlement mechanisms stayed intact.
The SEC’s approval validates that framework at the rulemaking level. Critically, the decision is technology-agnostic; regulators neither endorsed nor commented on any specific tokenization protocol, framing the ruling as a market structure matter rather than a technological bet.
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That distinction carries weight. It suggests the SEC is willing to accommodate tokenized instruments within its existing regulatory perimeter without locking the market into any single blockchain approach.
Exchanges Race to Build the Infrastructure
Nasdaq is not operating in a vacuum. In February, Intercontinental Exchange, parent of the New York Stock Exchange, announced its own platform for trading and settling tokenized securities. Several other exchanges have been running pilots targeting end-to-end infrastructure covering custody, trading, and settlement for digital assets.
The approval leaves meaningful questions unanswered. Broker-dealers, custodians, and the DTC each need to demonstrate operational readiness before tokenized listings go live. Russell 1000 issuers will similarly have to assess whether conversion offers genuine advantages over conventional listing structures.
Further SEC rule filings tied to individual securities are expected to follow. Interoperability with the broader market ecosystem and liquidity depth for tokenized instruments remain unresolved. For now, the ruling delivers the clearest regulatory signal yet that tokenized equities have a legitimate place in U.S. market structure, even as the path to mainstream adoption stays undefined.
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