Nasdaq has received authorization from the Securities and Exchange Commission to operate a pilot program allowing the trading of tokenized versions of select securities alongside conventional shares. This marks a significant move to merge blockchain technology with U.S. equity markets, providing a new avenue for trading major American stocks through digital representations on a unified platform.
Pilot Program Details
The approved initiative enables qualified participants to select between traditional shares and tokenized versions for securities drawn from the Russell 1000 Index, which represents the largest 1,000 publicly traded U.S. companies by market capitalization. The program scope also extends to certain exchange-traded funds tracking the S&P 500 and Nasdaq-100 indices. Both tokenized and traditional versions will be consolidated within a single order book, maintaining identical prices, ticker symbols, and shareholder privileges to ensure consistent investor protection and market transparency.
Settlement, Oversight, and New Partnerships
Clearing and settlement for tokenized securities will be facilitated by the Depository Trust Company, one of the largest securities settlement organizations in the world. Its mandate includes the safe and efficient transfer of assets for U.S. financial institutions. Under the pilot program, participants can opt for either standard or blockchain-based settlement processes for eligible transactions. Only authorized entities are able to take part, with all engagement remaining voluntary and subject to existing compliance frameworks.
Nasdaq’s partnership with the cryptocurrency exchange Kraken, announced earlier this month, aims to expand the distribution and issuance of tokenized securities on a global scale. Through this collaboration, clients will have the capability to transform conventional equities into blockchain-based tokens, and public companies may transition toward issuing tokenized equity as part of their capital market activity.
Intercontinental Exchange, known as the parent company of the New York Stock Exchange, is also intensifying efforts in tokenization. Earlier in March, it invested in the crypto platform OKX to support the launch of tokenized equity products and related derivatives, reflecting a growing trend of major U.S. exchange operators exploring blockchain settlement and asset innovation.
Tokenization uses blockchain to create digital facsimiles of real-world assets, streamlining the settlement process and potentially enabling trading beyond conventional hours. The approved structure ensures both formats coexist with equivalent regulatory scrutiny, reporting, and surveillance.
Regulatory Context and Stakeholder Feedback
SEC Chairman Paul Atkins stated that the agency would soon gather public comments regarding possible new exemptions for certain crypto-adjacent securities, including rules that could permit alternative fundraising mechanisms for tokenized assets without full registration under current securities laws. This echoes ongoing stakeholder discussions, with the SEC reviewing concerns about market supervision and possible price mismatches between digital tokens and their physical counterparts. Nasdaq filed amendments to its proposal in response, addressing these issues with enhanced technical and compliance safeguards.
Nasdaq began pursuing the application for the pilot in September 2025, with formal SEC approval granted on March 18, 2026. The dual-format approach seeks to maintain existing regulatory standards while introducing blockchain’s operational advantages to U.S. stock trading.
