Source: Nasdaq; Compiled by Golden Finance. Note: On September 8, 2025, Nasdaq announced it had filed a document with the U.S. Securities and Exchange Commission (SEC) to facilitate the trading of tokenized securities on the Nasdaq stock market. Chuck Mack, Nasdaq's Senior Vice President of North American Markets, joined Nasdaq Newsroom to discuss and interpret this new proposal. Nasdaq Newsroom: Simply put, what is the purpose of Nasdaq's new filing with the SEC? Chuck Mack: Nasdaq's proposed rule change would allow member firms and investors to trade tokenized equity securities and exchange-traded products (ETPs) on the Nasdaq market. The goal is to integrate digital assets into Nasdaq's existing infrastructure and systems, which will promote financial innovation while maintaining stability, fairness, and investor protection.
Specifically, the proposal provides a simple and clear way to enable the trading of tokenized securities within the existing regulatory framework, using the Depository Trust Company (DTC) to clear and settle transactions in token form.
It works like this: Securities can be traded on Nasdaq in traditional or tokenized form.
Traditional forms are digital representations of ownership and rights, but do not utilize distributed ledger or blockchain technology.
Tokenized forms are digital representations of ownership and rights that utilize distributed ledger or blockchain technology.
After an order is entered, participants can choose to clear and settle in either conventional or tokenized form, and the exchange will communicate the participant's instructions to the Depository Trust Company (DTC). All shares will trade on Nasdaq, subject to the same order entry and execution rules, have the same identifying numbers (CUSIPs) as traditional stocks, and entitle their holders to the same rights and benefits as traditional stocks.
Nasdaq Newsroom: What exactly are tokenized securities? Chuck Mack: There are two components here: tokens and security. In this context, a token refers to any digital representation of an asset created and recorded on a blockchain—the data storage method pioneered by Bitcoin. Tokens can include currencies like Bitcoin, tokens pegged to the US dollar, such as the stablecoin Tether (USDT), or any other form of blockchain-based representation of ownership or rights. Meanwhile, a security is a tradable financial asset that represents ownership or credit in a company—for example, a share of stock or a bond. Therefore, tokenized securities are representations of these traditional financial instruments that have been recorded on a blockchain or other distributed ledger technology. From our perspective, it's important to emphasize that while tokenized securities are technically different from the securities currently traded on the Nasdaq market, under our proposal, they still represent the same store of value as traditional securities. After all, we already live in a digital world. Today, stocks and other securities are represented and recorded digitally, so tokenization is just another way to represent assets digitally.
Nasdaq Newsroom: What are the key details in Nasdaq's proposal that ordinary investors should understand?
Chuck Mack: Fundamentally, Nasdaq is proposing to leverage the existing infrastructure of the U.S. market to enable the trading of tokenized securities.
There is significant global demand for Nasdaq-traded securities, and interest in tokenization technology is growing. Our proposal would enable market participants to access digital representations of these tokenized securities using a system they are familiar with and trust.
The proposed rule change would allow investors to choose whether the stock or ETP they wish to trade is represented in tokenized form or in traditional digital form. If they choose the tokenization option, DTC will handle the back-end work of clearing and settling the trade and recording the asset as a blockchain-based token. It's important to note that this transaction will still be conducted under existing SEC federal regulations to ensure fair and orderly trading. This is a key point we made in our filing: existing US rules do not preclude different types of security representation. If you're trading a stock and we have DTC tokenize it after the trade, it makes no difference in how the market operates, how you trade, how you get best execution, or how you buy and sell on the exchange. Importantly, traditional shares and tokenized shares have the same value, the same rights and interests, and the same market identification number. Nasdaq believes that not only can, but should, the tokenization of securities be achieved within existing market frameworks and regulations. This proposal is an important way to introduce tokenization to the market: it will not only allow this new technology to develop and gain widespread acceptance, but also ensure that the investor protections we have established over decades are upheld. Nasdaq Newsroom: Why was Nasdaq interested in tokenized securities in the first place? Chuck Mack: In some ways, it's a response to need: Many market participants, including Nasdaq, believe that tokenization has the potential to benefit investors, issuers, and the broader economy. Blockchain technology offers numerous potential efficiencies, including faster settlement, improved audit trails, and more streamlined order, trade, and settlement processes. Furthermore, equity assets, once blockchain-based, have the potential to be used in entirely new ways. All of this potential means there's tremendous excitement about this technology, and we know from the market that there's significant demand for tokenized securities trading. We want to be part of the solution, helping the market evolve, continue to meet investor needs, and ensure effective implementation. Past market failures have taught us that governance, resiliency, and investor protection must be built in from the outset. Nasdaq is committed to being a trusted cornerstone of the global financial system, which means adapting to market changes and embracing new technologies in an investor-first manner to foster capital accumulation. Ultimately, it all comes down to choice. If investors and market participants demand a particular approach, and we can implement it in a way that maintains market integrity, we want to give them that choice. Nasdaq Newsroom: Why did Nasdaq propose this particular model to bring tokenized securities trading to market? Chuck Mack: We want to make the trading process of tokenized securities simple and transparent for investors while leveraging the strengths of the existing resilient and trusted equity trading ecosystem. The proposed rule changes are designed to foster innovation in existing market infrastructure and structures, creating new opportunities for investors while strengthening the standards for the proper functioning of U.S. markets, as follows: Scale and Complexity: The U.S. equity market is the deepest and most liquid in the world, processing billions of transactions daily. Any new system must operate at this scale. It must be resilient, redundant, and fail-safe. Investor Protection: U.S. equity markets have safeguards and oversight to maintain the accountability and liability of companies involved in the transaction lifecycle, ensuring shareholder rights, dividends, and proxy voting. Our proposal also explicitly seeks to maintain the existing framework for tokenized securities trading to ensure price discovery, disclosure, and best execution. The goal is to ensure these principles remain relevant as the market evolves and modernizes. Another motivation for improving the existing system is that Nasdaq wants to prevent the emergence of fragmented markets consisting of different versions of the same asset across multiple blockchains, offering trading in tokenized securities but not working well together—especially without consistent rules. If this occurs, transparency could be reduced, liquidity could be fragmented, and prices could become chaotic. Raising capital while protecting investors is essential for well-functioning markets, and well-functioning markets are essential for a thriving economy—and at Nasdaq, we've always emphasized that this comes down to liquidity, transparency, and integrity. We want to ensure these pillars are protected as the market develops, which is the purpose of our application. Nasdaq Newsroom: Nasdaq recently announced changes to its listing standards, and this has led to news reports about corporate governance at crypto treasuries. How does this relate to today's announcement? Chuck Mack: These are independent issues. First, we recently announced further enhancements to Nasdaq's listing standards to address key liquidity and trading issues facing companies in the current market environment. These improvements primarily target certain micro-cap companies with lower liquidity profiles. Second, we are aware of recent media reports regarding crypto treasury companies. Nasdaq has not implemented any changes or new rules regarding these companies. As with any market development, Nasdaq consistently provides guidance to our listed companies on the application of existing listing rules, including shareholder approval rules applicable to any securities offering by a listed company. Third, today's announcement represents a separate filing with the U.S. SEC to facilitate the trading of tokenized securities on its market. While these issues are distinct, a common thread guides Nasdaq's actions in the capital markets: the goals of optimizing capital formation, protecting investors, and ensuring market integrity. Nasdaq Newsroom: What's next for tokenized securities?
Chuck Mack: Nasdaq's filing with the SEC will be open for public comment, and we look forward to hearing different perspectives. In fact, part of the reason we filed the filing is to facilitate discussion in a very transparent manner.
At the same time, the Nasdaq team will work closely with clients and stakeholders to explain our thinking and gather feedback on how best to advance the industry.
Globally, the adoption of tokenization clearly requires broad coordination across the industry. Market infrastructure providers, regulators, issuers, asset managers, and fintech companies all play an important role.
We welcome these discussions because they ultimately connect to Nasdaq's core purpose of promoting economic progress for all.
Economic prosperity depends on innovation and participation, and these forces require market structures that reduce friction and align incentives. Our tokenization approach represents a step forward in the development of global financial markets.
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