SEC opens formal investigation into Nasdaq’s bid to list tokenized stocks, testing how blockchain stocks can coexist with DTCC-approved stocks.
Summary
- SEC launches a consultation on Nasdaq’s proposal to trade tokenized securities under the same order book and rights framework as traditional equities.
- The settlement would still go through DTCC, while using blockchain for efficiency, both drawing industry support and calling for clearer rules.
- Ondo Finance and Cboe are urging the SEC to delay approval until DTCC clarifies the symbolic settlement, underscoring legal and competitive concerns.
The U.S. Securities and Exchange Commission has initiated a formal review of Nasdaq’s proposal to list and trade tokenized securities, according to regulatory filings, putting blockchain-based stocks under regulatory scrutiny that could shape the future of digital asset integration into traditional markets.
Nasdaq does have that asked approval to list and trade securities in token form, triggering a consultation process that examines regulatory, technical and policy considerations, the SEC filing showed. The assessment will determine whether tokenized stocks can operate alongside traditional stocks while maintaining existing market safeguards.
SEC rates Nasdaq
Under the proposal, tokenized shares and exchange-traded products would be traded in parallel with conventional shares on the same order book, with identical shareholder rights. Clearing and settlement would continue through the Depository Trust and Clearing Corporation, while blockchain technology would be leveraged to improve operational efficiency, the filing said.
The SEC has solicited public feedback on the proposed rule change to assess how digital representations of stocks could fit within existing market structures. The consultation represents the beginning of a review process and not a final determination, regulators indicated.
If approved, the framework would allow blockchain-based stocks to be traded alongside regular stocks without the need for separate systems or accounts for investors. Settlement would remain dependent on the DTCC infrastructure, ensuring continuity with current market processes.
The proposal has led to divided reactions from market participants. Industry groups have voiced their support, citing potential efficiency gains and modernization of post-trade processes. The U.S. Commodity Futures Trading Commission recently approved a pilot program that would allow tokenized assets to serve as collateral, indicating increasing regulatory acceptance of blockchain-based financial instruments.
However, Ondo Finance and Cboe Global Markets have opposed immediate approval, according to public comments submitted to the SEC. These companies have called on the regulator to delay action until the DTCC provides clearer guidance on settlement procedures for tokenized transactions, noting that all such transactions would remain dependent on the DTCC infrastructure.
The review reflects the increasing interest in tokenization in financial markets, while highlighting the regulatory focus on legal certainty, settlement integrity and investor protection. Any decision is expected to impact the pace of adoption of blockchain technology within mainstream stock trading, market observers said.
