In September 2025, Nasdaq filed with the U.S. Securities and Exchange Commission (SEC) a landmark rule-change proposal to enable trading of tokenised equity securities and exchange-traded products (ETPs) on the same platform as their traditional counterparts. The proposal signals a major shift in how digital-asset technology and traditional capital-markets infrastructure may converge.
Under the filing, designated SR-NASDAQ-2025-072, Nasdaq seeks to amend its rulebook so that a “security” listed on its exchange can be traded in either the “traditional form” (today’s digital record of ownership) or a “tokenised form” (a digital-ledger or blockchain-based representation) while still preserving all the core rights of the underlying asset.
The implications are broad: if approved and implemented, the change could allow digital representations of listed stocks and ETPs to reside, trade and settle on blockchain infrastructure, all while maintaining linkage to the traditional national market system. For the crypto industry, this is arguably one of the strongest validations yet of tokenised securities.
According to the documents, Nasdaq’s proposed rule amendments include: revising its Equity 1 definition so that “security” may include tokenised form; adjusting order entry rules so that participants may select a “tokenised settlement” flag on an order; clarifying that routing, execution priority, and order book treatment remain unchanged whether the asset is traded in tokenised or traditional form; and establishing that tokenised securities must share the same CUSIP number, be fungible with their traditional counterpart, and afford holders the same material rights (dividends, voting, liquidation claims).
Orders flagged for tokenised settlement would be routed by Nasdaq in the same order-book, the same matching engine, the same execution priority as non-tokenised securities. Post-execution, the instruction would be communicated to the Depository Trust Company (DTC) or another infrastructure provider, which would execute the token-minting and settlement processes.
Nasdaq emphasises that this approach leverages existing market infrastructure, regulatory frameworks and participant practices, rather than building a separate, fragmented token-only market. The filing states that trading tokenised securities should remain within the context of the national market system (NMS) and retain the same standards of investor protection, transparency and market-wide liquidity.
The proposal from Nasdaq represents a crucial moment for both traditional finance and the crypto/blockchain sector. On one side, this is validation for the concept of tokenisation — converting real-world assets (equities, funds, ETPs) into digital tokens that can be traded and settled via distributed-ledger or blockchain methods. On the other side, it signals that major established financial venues view blockchain not as an external experiment but as a technology to be integrated into mainstream trading infrastructure.
For investors and crypto enthusiasts alike, the change could lead to new pathways: mainstream securities being available in token form; potential for faster settlement, lower friction; new product innovation (tokenised ETPs, secondary markets in tokenised equity); and increased interoperability between crypto markets and regulated securities markets.
It may also open the door for exchange-traded products (ETPs) that combine blockchain-native assets with traditional securities attributes under regulated exchanges. For the crypto ecosystem, this reduces the artificial boundary between “crypto only” and “traditional finance only.”
Despite the promise, the path is far from smooth. Several significant issues and risk points remain.
Infrastructure readiness. While Nasdaq’s proposal uses existing rules, the token-settlement path depends on DTC and other clearing/settlement firms building infrastructure to mint, move and settle tokenised securities via a distributed ledger. In the filing, Nasdaq notes that DTC is “currently developing” the requisite services and that final implementation may stretch into 2026.
Regulatory clarity and definitions. Tokenised securities must preserve the same rights: fungibility, same CUSIP, same shareholder rights. If those conditions are not fully met, instruments will be treated as distinct (like ADRs, derivatives) and may carry different regulatory treatment. Ensuring tokenised versions are full equivalents is a major legal, operational and technical hurdle.
Risk of fragmentation. One of Nasdaq’s stated concerns is that separate, unconnected tokenised markets could fragment liquidity, undermine consolidated markets (NBBO) and reduce transparency. The proposal emphasises that tokenised securities must trade on the same order-book, under the same rules. But if multiple tokenised venues proliferate outside the national market system, the risks remain.
Investor protection and custody. Tokenised securities might reside in digital wallets, use smart contracts or new custody models. Ensuring the same level of investor protections, surveillance, reporting, best-execution obligations and market resilience that apply to traditional securities is critical. The filing reiterates that trading must remain within regulated venues.
Issuer and market participant readiness. Brokers, market-makers, issuers must update systems to handle the “tokenisation flag,” token settlement paths, wallet integrations, new SSL/crypto-key custody risks, etc. Although Nasdaq states that participant modifications should be minimal, in practice the technical and operational burden could be significant.
With the proposal formally filed in early September 2025, the SEC has opened a comment period and must decide whether to approve the rule change. If progressed smoothly, Nasdaq suggests the tokenised-settlement infrastructure could become available by Q3 2026, depending on DTC’s readiness and regulatory sign-offs.
Indicators to monitor:
- The public comment phase: What feedback do brokers, issuers, crypto firms, institutional investors provide?
- Infrastructure builds: How far DTC and other clearing/settlement providers advance their token-settlement systems.
- Pilot issuances: Which equity issuers or ETP managers step forward to tokenise shares under the new rules?
- Market adoption metrics: Liquidity, tokenised vs traditional share volumes, spreads, custody flows.
- Regulatory responses: Will states, FINRA, other exchanges modify behaviour? Will other jurisdictions follow suit?
If approved and implemented, this move could reshape both crypto and traditional capital markets. For the crypto sector, tokenised equities on a regulated primary stock exchange serve as a major legitimising step. It may lead to: increased institutional adoption of tokenised assets, convergence between DeFi infrastructure and regulated markets, new products that mix crypto mechanics with securities regulation, and growth in tokenised securities as a category.
For traditional markets, integrating tokenised forms introduces blockchain-based efficiencies: faster settlement, programmable assets, fractionalisation, micropayments, enhanced issuance pipelines. It could also accelerate competition among exchanges and post-trade infrastructure providers who adapt to tokenisation.
Moreover, this development may push regulators globally to revisit how tokenised securities are defined, supervised and treated. It may encourage other major exchanges (in Europe, Asia) to file similar rule changes, prompting a wave of standardisation in tokenisation.
Nasdaq’s proposal to allow trading of tokenised equity securities and ETPs is more than a regulatory formality—it is a bridge between the worlds of traditional finance and blockchain innovation. By offering tokenised versions of familiar assets under the same market rules, Nasdaq seeks to integrate distributed-ledger technology into regulated markets rather than creating separate siloed crypto exchanges.
Nevertheless, the success of this initiative will depend on execution: infrastructure readiness, regulatory approval, operational transitions, investor protection, and market acceptance. For crypto-assets watchers, capital-markets professionals and fintech innovators, what unfolds next could mark the beginning of a new era in asset tokenisation and securities trading. If it works, tokenised securities might become the norm rather than the exception—blurring the boundary between traditional equities and digital assets.