Nasdaq Gets SEC Approval for Tokenized Equity Trading : U.S. Stocks Are Going On-Chain

The U.S. Securities and Exchange Commission has approved a Nasdaq rule change to launch a pilot program for tokenized equity trading, allowing eligible securities to be traded and settled as blockchain-based tokens on a major American exchange for the first time.

What the Approval Actually Permits

The rule change, filed as SR-NASDAQ-2025-072, establishes a controlled pilot rather than a full market opening. Eligible assets are initially restricted to highly liquid securities, specifically constituents of the Russell 1000 Index and ETFs tracking the S&P 500 and Nasdaq-100. That scope covers some of the most actively traded instruments in U.S. markets, but it deliberately excludes smaller or less liquid names where tokenized settlement could introduce additional risk.

Participation is restricted to DTC Eligible Participants according to the SEC filling, meaning qualified brokers and financial institutions with existing Depository Trust Company access. Retail investors do not have direct access to the tokenized settlement layer under the current pilot structure. The program is institutional by design.

How Tokenized and Traditional Shares Coexist

The most operationally significant aspect of the approval is the unified trading environment. Tokenized shares and traditional shares share the same order book, the same price, and the same ticker. A buyer interacting with a Russell 1000 constituent on Nasdaq will not see a separate tokenized market. They will see one market with an optional settlement mechanism.

Tokenized shares maintain the same CUSIP identifier and carry identical shareholder rights to traditional shares, including voting rights and dividend entitlements. That equivalence is not cosmetic. It means tokenized equity holders are not holding a derivative or a receipt. They hold the same legal instrument through a different settlement infrastructure.

Participants can opt into blockchain-based settlement on a T+1 cycle, processed through the Depository Trust Company. The T+1 timeline matches the current standard settlement window for U.S. equities, which means the pilot does not introduce faster settlement in its initial phase. The DTC integration is the more significant detail. Running tokenized settlement through existing DTC infrastructure rather than a separate blockchain system reduces counterparty risk and keeps the pilot within the established regulatory perimeter.

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Why This Approval Is Structurally Different

Previous tokenized asset initiatives in the U.S. have operated in private or permissioned environments outside traditional exchange infrastructure. This approval places tokenized equity settlement inside Nasdaq’s regulated market structure under direct SEC oversight. That distinction separates it from earlier experiments in kind, not just degree.

The pilot scope is narrow by design. Russell 1000 constituents and major index ETFs are the least controversial starting point available. They carry deep liquidity, well-established price discovery, and institutional familiarity. If the settlement mechanics perform without incident at this tier, the case for expanding the eligible asset universe becomes easier to make to regulators and market participants alike.

What the approval does not address is public blockchain access, retail participation, or cross-border tokenized settlement. Those questions remain outside the current pilot scope. The SEC has approved infrastructure for institutional tokenized settlement within existing market architecture. The broader on-chain equity market is a separate and longer conversation.

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