The U.S. Securities and Exchange Commission has greenlit Nasdaq's pilot program for trading and settling tokenized equities. Under the approval order, Nasdaq may allow eligible participants to trade securities in either traditional or tokenized form on the same platform.
Scope and Mechanism of the Pilot
The pilot is limited to securities within the Russell 1000 Index and exchange-traded funds tracking the S&P 500 and Nasdaq 100. Tokenized shares carry the same rights and pricing as standard equities. Tokenization involves representing real-world assets as digital tokens on a blockchain, enabling faster settlement and extended market functionality.
CEO Tal Cohen's Vision
Nasdaq first filed the proposal in September 2025. CEO Tal Cohen said at the time that the model can shorten settlement cycles and improve processes such as proxy voting, while maintaining investor protections. He emphasized that tokenization boosts operational efficiency without compromising security and compliance.
Regulatory Concerns Addressed
During the review, the SEC flagged concerns over market surveillance and potential pricing discrepancies. Those issues were resolved through amendments that clarified safeguards, according to the filing. The commission believes the pilot, within its limited scope, will help assess the impact of tokenized securities on market quality without posing excessive risk to investors.
Partnerships: Kraken and Backed
Nasdaq has partnered with crypto exchange Kraken and tokenization platform Backed to build the infrastructure. Kraken will provide digital asset custody and trading support, while Backed handles the underlying tokenization technology. The collaboration aims to bridge traditional securities with the crypto ecosystem.
Industry Momentum: DTCC and ICE Proceed
On the same day, the SEC also authorized the Depository Trust & Clearing Corporation to pilot tokenization initiatives. Separately, Intercontinental Exchange, parent company of the New York Stock Exchange, has backed a project with OKX to launch tokenized stocks. These moves signal growing regulatory openness to tokenized assets, with both traditional finance and crypto firms accelerating adoption.