Nasdaq has submitted a proposed rule change to the U.S. Securities and Exchange Commission to enable the trading and settlement of tokenized equities and exchange-traded products (ETPs) listed on its exchange. According to the filing, submitted on September 8, 2025, the plan is designed to introduce blockchain-based settlement within the existing market structure rather than create a separate parallel market.
Tokenized shares must match traditional securities
The proposal says tokenized securities must be fully fungible with conventional shares. They would carry the same CUSIP and preserve the same shareholder rights, including voting and dividends. In practice, Nasdaq is framing tokenization as an extension of today’s digital book-entry records, not as a new asset class detached from the underlying listed security.
The exchange also explicitly excludes non-fungible “shadow tokens.” This distinction is important because it signals that Nasdaq wants tokenization to fit inside existing securities and compliance frameworks, instead of introducing instruments that could fragment ownership records or complicate regulatory oversight.
Existing order book, optional blockchain settlement
Under the proposal, trading would continue on Nasdaq’s existing order book, helping avoid liquidity splitting between traditional and tokenized versions of the same security. Settlement, however, could take place through DTC’s distributed ledger technology platform, giving market participants a blockchain-based post-trade option.
Nasdaq also proposes limiting trading in tokenized securities to regular market hours. That restriction is meant to reduce the risk of fragmented liquidity and preserve orderly price discovery. A major operational objective behind the initiative is to move toward a T+0 settlement timeline.
Launch could come by late Q3 2026
If approved by the SEC, the initiative could go live as early as late Q3 2026. The filing suggests that major U.S. market infrastructure operators are exploring how blockchain can be integrated into regulated capital markets without altering the legal nature of listed securities or weakening investor protections.
Rather than attempting to reinvent equity markets from scratch, Nasdaq’s proposal takes a more incremental route. It focuses on improving settlement efficiency and modernizing market infrastructure while keeping tokenized securities aligned with existing trading, custody, and rights frameworks. That approach may shape how tokenized stocks evolve in regulated markets over the next several years.