Nasdaq Wants to Trade Tokenized Stocks – SEC Filing Revealed

• Nasdaq filed with the SEC to allow tokenized stock trading on its platform and wants these digital stocks to trade like regular stocks. 

• Galaxy Digital became the first Nasdaq company to tokenize its shares, and other exchanges like Coinbase are already working on similar projects. 

• The SEC’s approval could lead to 24/7 trading markets and bring traditional finance closer to blockchain technology.

Nasdaq has officially filed a proposal with the Securities and Exchange Commission seeking approval to trade tokenized stocks on its exchange platform. The major stock exchange operator submitted a rule change request that would modify existing securities definitions and trading protocols.

The filing represents a significant step toward integrating blockchain technology into traditional equity markets. Nasdaq’s proposal comes after Galaxy Digital became the exchange’s first listed company to tokenize its common stock shares.

Trading Mechanics and Market Structure

Nasdaq outlined specific operational details for tokenized stock trading in its SEC submission. The exchange proposes that tokenized securities should maintain identical trading characteristics to conventional stocks when they carry equivalent shareholder rights.

The platform plans to implement clear labeling systems for tokenized stocks. This transparency measure ensures market participants can easily identify these digital securities during trade settlement processes.

Order execution priority will remain consistent between tokenized and traditional stocks. Nasdaq’s proposed framework maintains the existing market structure while accommodating blockchain-based securities.

Regulatory Environment and Industry Support

The SEC previously established that tokenized stocks retain full securities classification under federal law. This regulatory clarity provides a foundation for Nasdaq’s current filing and potential approval process.

Leading cryptocurrency exchanges, including Robinhood and Coinbase, have partnered with tokenization platforms. These collaborations demonstrate growing industry momentum toward digitizing traditional equity instruments.

The Commission launched Project Crypto as part of broader initiatives to advance on-chain market infrastructure. This regulatory program signals potential openness to Nasdaq’s tokenization proposal.

Market Innovation and Future Prospects

Paul Atkins’ SEC administration has demonstrated support for cryptocurrency sector innovation. This regulatory stance may favor approval of Nasdaq’s tokenized stock trading framework.

The SEC and Commodity Futures Trading Commission will host a joint roundtable discussion on September 29. The agenda includes exploring possibilities for 24-hour trading markets, which could complement tokenized stock implementation.

Successful approval of Nasdaq’s rule changes could establish precedent for other major exchanges. Integrating blockchain technology into traditional markets represents a fundamental shift in securities trading infrastructure.

The proposal addresses operational concerns while maintaining existing investor protections. Nasdaq’s comprehensive approach balances innovation with regulatory compliance requirements.