A milestone regulatory decision is set to reshape how traditional equities are traded in the United States, as Nasdaq has gained Securities and Exchange Commission approval to allow select stocks and major exchange-traded funds to settle as digital tokens on its main market. This move signals traditional finance’s growing embrace of blockchain infrastructure, with both major exchanges and institutional investors charting a course toward tokenized securities.
SEC Grants Go-Ahead For Tokenized Trading
The SEC has authorized Nasdaq to introduce tokenized trading for securities within the Russell 1000 Index—a group containing the largest American public companies by market capitalization—and certain benchmark-tracking ETFs, including those following the S&P 500 and Nasdaq 100. Nasdaq, best known as one of the world’s leading electronic stock markets and operator of the NDAQ listing, initially filed for this transformative change in September 2025, seeking to integrate both traditional and blockchain-based settlement on its primary trading platform.
Moving forward, investors on Nasdaq will have the ability to choose between purchasing equity as standard shares or as blockchain-based digital tokens, all within the boundaries of existing securities laws. Regardless of format, settlements for these tokenized trades will be executed by the Depository Trust Company (DTC), a long-standing institution that processes transactions for nearly all U.S. stock market trades.
Rising Industry Competition In Blockchain Settlement
Intercontinental Exchange (ICE), which owns and operates the New York Stock Exchange, is also rapidly advancing on a similar front. After announcing in early 2026 that it had built an on-chain settlement platform for tokenized securities, ICE is now seeking the regulatory approvals needed to officially launch this system. As a global operator of financial exchanges and clearing houses, ICE is a direct strategic rival to Nasdaq in this emerging sector.
The move toward increased tokenization is being accelerated by both changes in the U.S. regulatory landscape and mounting pressure among financial service providers to streamline post-trade processes. Policymakers in the United States, including President Donald Trump and SEC Chair Paul Atkins, have placed notable emphasis on digital innovation, expressing an ambition to ensure American leadership in crypto infrastructure. SEC Commissioner Hester Peirce noted that tokenized securities still fall under existing federal securities laws, emphasizing the need for strict compliance by market participants.
SEC Commissioner Hester Peirce explained the core stance: “Tokenized securities are still securities,” clarifying that regulatory standards will continue to apply regardless of settlement technology.
Nasdaq has also advanced its blockchain efforts through a partnership with Payward, the company that operates Kraken, to develop an “equities transformation gateway.” This initiative aims to further integrate blockchain-based solutions into the fabric of traditional equity trading, reflecting a broader strategic trend among legacy exchanges.
According to the timeline included in regulatory documents, the first token-settled trades on Nasdaq are expected to be executed by the end of the third quarter of 2026. This timeframe provides both market participants and institutional investors with a clear window to adapt infrastructure and compliance measures.
With multiple exchange groups pursuing similar on-chain solutions and regulatory acceptance now established, industry observers view the SEC approval as a turning point for mainstream tokenization within the securities markets. As these platforms come online, clients may increasingly view tokenized equity as a viable alternative to conventional settlement.
