Author: Aki Wu on Blockchain

On September 8, 2025, Nasdaq submitted a landmark proposal to the U.S. Securities and Exchange Commission (SEC) seeking to amend exchange rules to allow the trading of tokenized securities on its market. This means that U.S. stocks listed on Nasdaq, such as Apple and Amazon, are expected to be traded and settled in the form of blockchain tokens in the future. If approved, this would be the first case of a major U.S. securities exchange allowing the trading of tokenized stocks, marking the first large-scale introduction of blockchain technology into the core markets of Wall Street. This article will systematically outline the key points of the Nasdaq proposal, the motivations behind it, and the potential market changes it may bring, as well as its impact on the "U.S. stocks on-chain" sector and related areas, and explore the potential development paths of this innovative initiative.

Proposal Highlights: Detailed Explanation of Nasdaq's Rule Amendments

The 19b-4 rule amendment document submitted by Nasdaq to the SEC primarily aims to allow member broker-dealers and investors to choose to trade and settle stocks and exchange-traded products (ETPs) listed on the Nasdaq market in a tokenized form. The specific rule revisions include the following aspects:

1. Expanding the Definition of "Securities," Adding Tokenized Form Equity 1, Section 1

The proposal first modifies the exchange's definition of "securities," emphasizing that "tokenized securities are still securities," rejecting the "island" trading model that disconnects from the main market and expanding it to include two forms:

● Traditional form: Refers to the digital representation of asset ownership and rights without using distributed ledger or blockchain technology. This corresponds to the electronic bookkeeping form currently used in U.S. stocks, essentially still corresponding to the electronic registration of paper securities.

● Tokenized form: Refers to the digital representation of asset ownership and rights, recorded and transferred using blockchain (distributed ledger) technology. In simple terms, it means issuing the rights corresponding to stocks on the blockchain, represented in token form.

Nasdaq clearly states that a tokenized security is considered equivalent to its corresponding traditional security only when it possesses fully homogenous characteristics, allowing it to be traded on the same order book as the traditional form. This means that the token must meet the following criteria: it must be fungible with traditional stocks, share the same CUSIP code (Committee on Uniform Securities Identification Procedures), and grant the holder the same substantive rights and privileges as traditional stocks— including claims to company equity earnings, dividend rights, voting rights, and rights to residual asset distribution during company liquidation, among others. If the tokenized form fails to grant equivalent rights to the original stock (such as no voting rights, no shareholder rights, etc.), or does not share the same CUSIP as the original stock, the exchange will not consider it equivalent to traditional securities but will treat it as a different product, such as a derivative or American Depositary Receipt (ADR).

Due to this high standard, most so-called "tokenized stocks" currently on the market, such as Robinhood's "Stock Tokens" and Xstocks, do not actually meet the above criteria and are at best shadow tokens that map stock prices, not representing true equity, and typically do not grant voting rights; dividends are often reflected in reinvestment or cash equivalents; legal relationships often point to SPVs or issuing vehicles rather than the listed company itself, with most products primarily redeemable for cash, and direct "exchange for original stocks" facing custody and compliance restrictions.

2. Unified Matching, Segregated Settlement: Trading and Clearing Mechanism

Equity 4, Rule 4757

Nasdaq plans to fully integrate tokenized securities with traditional securities at the trading level. The proposal stipulates that as long as the token version of a stock meets the aforementioned homogeneity requirements, it will share the same order book with traditional stocks and be matched according to the same order matching and priority rules. In other words, from the perspective of the exchange's matching engine, there is no distinction between buy and sell orders for tokenized and non-tokenized securities; they are treated equally. In fact, Nasdaq emphasizes: "At the trading stage, there is no difference between the two; the execution process is essentially identical."

Equity 4, Rules 4756, 4758

The differences manifest at the settlement level. Currently, U.S. stock trading typically completes clearing and settlement through the Depository Trust Company (DTC) after a trade is executed. With the introduction of tokenized forms, Nasdaq will provide trading participants with a new option to settle in token form. The specific process is as follows:

When broker-dealers input orders to the exchange, they can choose to specify that the order wishes to settle in token form. If the order is executed and marked for token settlement, Nasdaq will pass the clearing instructions for that transaction to the DTC, which will execute the transfer of the securities through blockchain in the background.

The DTC will complete the process of registering stock ownership as a token on the chain based on its own business rules and systems (its blockchain settlement platform currently under development). The entire process is transparent and seamless for front-end investors; trading still occurs on Nasdaq, but the clearing and settlement shift from traditional electronic bookkeeping to blockchain registration, with stocks ultimately held in token form at a chain address.

It is worth noting that Nasdaq's move is not to create a new market from scratch but to leverage existing market infrastructure, introducing blockchain as the underlying recording technology without changing the front-end trading mechanism. Therefore, traditional stocks and token stocks will have unified pricing during the trading phase, sharing market depth and liquidity, with complete consistency in information transparency and risk control monitoring. As Nasdaq states in the document, this plan aims to prevent different versions of tokenized stocks from competing on multiple blockchains, leading to liquidity fragmentation, ensuring that core mechanisms of national market systems, such as price discovery and best execution, are not impacted. This addresses the previous pain points of "tokenized stocks," namely the issues of multi-chain (ETH/SOL, etc.) + multi-market (compliant on-exchange vs. crypto exchanges/DEX) + regional compliance restrictions, which have led to insufficient liquidity due to the dispersion of market-making capital and order books.

3. Trading Session Restrictions: No 24/7 Trading Available Yet

Tokenized stocks have faced issues of deep thinness and high impact costs during U.S. stock market off-hours since their launch. This misalignment of trading hours has also contributed to liquidity shortages and price decoupling. Therefore, many investors are concerned whether tokenized stocks can break through the existing trading hour restrictions of U.S. stocks to achieve "24/7" trading. Nasdaq's proposal provides a cautious answer: at the current stage, tokenized securities can only be traded during existing trading hours and will not extend or break through trading times. Tokenized stocks cannot be traded outside of normal and extended trading hours and will still follow U.S. stock conventions, only being tradable during regular hours (9:30–16:00) and pre-market and after-hours sessions from Monday to Friday, with no support for weekend or late-night trading.

4. Path to On-Chain Settlement

The trading of Nasdaq tokenized stocks relies on the core clearing institution of the traditional financial market—the Depository Trust Company (DTC). It is noteworthy that the DTC has been exploring DLT clearing in recent years, with its "Project Ion" being a blockchain-based stock settlement platform aimed at achieving T+0 or even real-time settlement. According to public information, Project Ion went live in a parallel testing environment in 2022, processing over 100,000 stock trade settlement instructions daily. The DTC collaborated with enterprise blockchain technology provider R3 to develop this platform, utilizing R3's Corda distributed ledger software to build a private permissioned chain as the underlying architecture, which is a non-public consortium chain.

It can be inferred that Nasdaq's tokenized trading is more likely to operate on the DTC's permissioned chain platform rather than on public chains like Ethereum, which are widely discussed in the community. This way, the DTC can still use the traditional system as the authoritative record while running in parallel with the new DLT system to ensure security redundancy. Therefore, under Nasdaq's plan, on-chain settlement may actually occur in a controlled "consortium chain" environment, maintained by financial infrastructure operators like the DTC. This ensures transaction privacy, network reliability, and regulatory controllability, meeting Wall Street's high standards for trading and settlement systems.

Consortium chains allow participants to have access control, making data privacy and transaction speed more manageable and compliant with regulatory requirements. Therefore, it is foreseeable that the records of Nasdaq tokenized stocks will not appear on public blockchain explorers but will be stored in a distributed ledger maintained by Nasdaq, the DTC, and related custodians. As for how specific smart contracts will be deployed, Nasdaq has not specified in public documents, but it is clear that Nasdaq does not intend to introduce a completely open token trading environment; rather, it aims to use blockchain as "back-end technology" to enhance efficiency, while front-end trading activities still occur within a controlled system. The only change is in the bookkeeping method, meaning that what investors hold will be a chain record recognized by regulatory authorities, rather than a freely circulating crypto token completely detached from the traditional system.

Why is Nasdaq Applying for Tokenized Securities?

Blockchain has great potential to enhance the efficiency of financial market infrastructure. Currently, U.S. stock trading and settlement still operate on a T+1 (with some markets at T+2) delayed settlement basis, while blockchain technology can achieve near real-time (T+0 or even within seconds) settlement, reducing the time funds and securities are held and lowering counterparty risk. Additionally, the transparent and immutable nature of blockchain's distributed ledger can provide comprehensive audit trails, reducing reconciliation and manual operation errors. Nasdaq hopes to introduce tokenized settlement to accelerate post-trade processes while lowering costs in clearing and custody. This can be seen as an attempt to innovate the securities settlement mechanism from the ground up. Nasdaq states in the document: "Today's stocks and other securities have already evolved from paper to electronic records, and tokenization is just another way to digitally represent assets." By embracing blockchain, the exchange demonstrates its commitment to driving fintech innovation to avoid falling behind in the new wave of technological advancements. The asset tokenization market is expected to experience explosive growth, with the total market value of global tokenized assets projected to soar from approximately $21 trillion in 2024 to about $41.9 trillion in 2032, with a compound annual growth rate of 45.8%.

Therefore, both investors and issuers have shown strong interest in the tokenization of securities, representing a significant emerging market opportunity. Regulators and market participants in many countries are actively exploring the on-chain securities landscape, and the U.S. cannot fall behind. As a market organizer, Nasdaq aims to align with this trend, providing new trading options for clients and attracting more capital to the U.S. market. By positioning itself early, Nasdaq can strengthen its competitiveness in the digital asset era, especially against the backdrop of the White House's active promotion of crypto asset innovation and the creation of a digital asset-friendly regulatory environment. It is crucial to ensure that tokenized securities develop within a compliant framework to prevent market fragmentation. As mentioned earlier, many tokenized stocks are currently traded on offshore, unregulated platforms, lacking investor protection, and different platforms operate independently, leading to liquidity fragmentation and market opacity. Nasdaq's proposal aims to incorporate these innovations into the mainstream regulatory system, thereby preventing investors from falling into unregulated risks while chasing novel concepts.

Although exchanges will not aggressively open various flashy features in the short term, in the long run, stock tokenization opens up imaginative possibilities for financial innovation. For example, stocks can be used as on-chain collateral to participate in decentralized finance (DeFi), and equity tokens can be programmed into smart contracts to automate dividends, voting, and even create entirely new derivative and index products. These scenarios, which are difficult to achieve under traditional frameworks, are expected to gradually become possible after tokenization. However, it is important to note that the trading venue for Nasdaq's tokenized securities remains Nasdaq itself, meaning that trading is facilitated in a compliant, centralized environment, and not everyone can trade anonymously on-chain at will.

Conclusion: Long-Term Opportunities and Industry Outlook

Nasdaq's push for tokenized securities trading is undoubtedly a significant innovation in the underlying technology of securities trading. It marks a critical step toward the blockchain era for traditional financial markets. From regulatory approval to technical readiness, this transformation cannot happen overnight. According to Nasdaq's statements in the application documents, the readiness timeline for the relevant blockchain settlement infrastructure may extend to the end of Q3 2026. Nasdaq anticipates that, assuming the proposal is approved by the SEC and the DTC's distributed ledger settlement system is launched by then, U.S. investors can expect to see the first securities transactions settled in token form by the end of Q3 2026.

For investors, it is essential to recognize that this is a long-term theme. The GENIUS Act has ushered in a new era of stablecoin compliance, and Nasdaq's tokenized securities could become the next game-changing milestone. In the coming years, policy advancements and technological milestones related to this theme will continuously become market focal points, nurturing periodic investment opportunities in sectors such as oracles and RWA. As Nasdaq's management has stated, innovation should occur within the national market system to protect investors, rather than being left in unregulated offshore wilderness. As Nasdaq's tokenized stocks gradually take shape, they will unlock greater imaginative possibilities for institutional capital to participate in on-chain stocks.

For instance, large institutions can obtain real stock tokens through official channels and confidently invest in DeFi for returns. This is a level of high-tier capital that shadow token platforms currently struggle to attract. For general users, once sovereign-level exchanges offer compliant stock tokens, the necessity to hold shadow versions that "do not confer shareholder rights" diminishes.

While the prospects are bright, potential limitations must also be acknowledged. First, in the initial stages, the direct benefits for ordinary investors may be limited. Currently, retail investors in the U.S. can trade stocks quite conveniently through brokerages, and after Nasdaq's tokenization, there will not be an immediate significant reduction in their trading costs or barriers. Benefits such as 24/7 trading may not be desirable for non-professional investors, who may not want stocks to be traded and fluctuate seven days a week without rest. Additionally, smart contracts are not immune to vulnerabilities or hacking risks; if issues arise with tokenized stock contracts, it remains uncertain who will bear the responsibility. Furthermore, some unregulated offshore tokenized stock trading has previously exhibited significant price deviations, exposing issues of insufficient liquidity and potential manipulation. Under the Nasdaq proposal, such deviations are expected to decrease, as tokens are backed by real stocks, and traditional market makers participate in pricing.

Nasdaq's tokenized stock trading will become a significant milestone in the commercialization of blockchain technology. It signifies that blockchain is no longer confined to the cryptocurrency sphere but is genuinely entering the core scenarios of mainstream finance. From an industry perspective, this serves as an authoritative endorsement of the blockchain and Web3 ecosystem, inspiring more companies and developers to invest in this field. From a financial history standpoint, this event may be viewed as the starting point for the digital transformation of traditional securities markets, akin to the transition from paper to electronic trading decades ago. For the Web3 community, this is an opportunity to turn ideals into reality: concepts like decentralization and tokenization can only unleash their maximum value when integrated with the real economy. While this may not be the most utopian outcome for pure decentralization idealists, it significantly accelerates the process of large-scale blockchain application.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。