Nasdaq filed a proposal to the Securities and Exchange Commission (SEC) for approval to list and trade tokenized stocks alongside traditional securities. The sought regulation modification would broaden the definition of "security" to include digital tokens that represent shares, as long as they have equal rights and benefits.
If approved, tokenized equities would be traded on the same order books, with the same execution priority, shareholder rights, and paperwork requirements as traditional stocks. Nasdaq underlined that tokenized assets would be appropriately identified to ensure proper processing and settlement by parties such as the Depository Trust Company.
The move intends to bring blockchain technology into the fundamental US equities markets, increasing liquidity and market access while preserving investor protections. Nasdaq has expressed worries about "siloed trading venues" that lack regulatory control, emphasizing the significance of trading tokenized securities in regulated exchanges.
This idea underscores Nasdaq's broader attempts to innovate financial markets in the face of rising interest in tokenization, and it follows similar initiatives by cryptocurrency exchanges and financial institutions. The SEC's assessment and public comment period will come before any implementation.
