The U.S. Securities and Exchange Commission has approved a proposal from Nasdaq to test trading in tokenized versions of equities and other securities. This follows Nasdaq’s earlier statements that tokenized shares could enable faster settlement, potentially moving toward “instant or atomic settlement,” though infrastructure remains a constraint.

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The exchange submitted the plan in September. It proposed a pilot that would allow certain widely traded stocks to be bought and sold either in their conventional form or as blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term-based tokens on the same platform. The initiative will involve the Depository Trust Company, which provides core post-trade infrastructure in U.S. markets.

Tokenized Shares Mirror Traditional Stock Rights

Under the structure outlined in the filing, tokenized shares will not be treated as separate instruments. They will be listed under the same ticker, match the same price, and trade within the same order book as standard shares. Investors will also retain identical rights regardless of the format.

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Tokenization refers to the process of representing financial assets on distributed ledger systems. Large financial institutions have recently increased testing in this area, focusing on reducing settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term times and enabling trading beyond standard market hours.

The SEC said participation in the pilot will be restricted. Only “eligible participants” will be allowed to access tokenized trading. These participants can choose between traditional and tokenized formats when executing trades.

Nasdaq receives SEC nod for trading in tokenized securities https://t.co/IM3avyH0J0

— Reuters Legal (@ReutersLegal) March 19, 2026

SEC Addresses Tokenization Surveillance Concerns

The pilot will include large-cap U.S. equities and major index-linked funds. Eligible securities cover stocks in the Russell 1000 Index, as well as ETFs linked to the S&P 500 and Nasdaq-100.

During the SEC review, some comments raised concerns about how the model would handle market surveillance and whether tokenized and traditional shares could trade at different prices. The regulator said these issues were addressed through a revised submission that provided additional operational details.

The approval follows Nasdaq’s broader tokenization initiatives. Earlier in March, the exchange said it would work with Kraken to allow securities to be converted into tokenized formats for blockchain use. The program also includes a framework for companies to create and issue their own tokenized shares.

Other market operators are pursuing similar moves. Intercontinental Exchange recently invested in OKX to develop tokenized equity products.