Nasdaq can now settle trades as digital tokens. The two biggest US exchanges are racing to remake how equity markets work.
The SEC approved a plan on Wednesday that allows certain securities listed on Nasdaq to trade in tokenised form, settling on a blockchain rather than through the book-entry system that has underpinned equity markets for decades.
It is a narrow approval with a long list of conditions, but it marks the first time a regulator has formally blessed the integration of blockchain technology into the core infrastructure of US stock trading.
The mechanics matter here. Tokenised shares will not trade on a separate platform or in a parallel market. They will sit on the same order book as regular shares, carry the same ticker and identification number, trade at the same price, and confer identical rights on the holder.
The only difference is in how the trade settles: via blockchain token rather than the traditional ledger system run by the Depository Trust Company, which will handle clearing for the new framework. Existing surveillance, data reporting and settlement timelines remain in place.
In other words, Nasdaq is not building a crypto exchange. It is rewiring the back end of the one it already has.
Why this is happening now
Tokenisation of real-world assets has moved from theoretical talking point to active business in a short period. The appeal is straightforward: blockchain-based settlement can be near-instant and, in principle, continuous, rather than the standard two-day settlement cycle that still governs most equity trades. For institutional investors managing large positions across time zones, that compression has real value.
Nasdaq filed for regulatory permission to run this pilot in September. The SEC’s approval follows a change in posture at the regulator under the current administration, which has been more receptive to digital asset integration than its predecessor.
The competitive pressure is real. Intercontinental Exchange, which owns the New York Stock Exchange, has invested in crypto exchange OKX and announced plans to launch tokenised stocks.
Nasdaq itself said last week it is building a framework to let publicly listed companies issue blockchain-based versions of their own shares, and has partnered with crypto exchange Kraken to distribute those products globally. The two biggest US exchanges are now openly racing each other into the same space.
What changes and what doesn’t
For most retail investors, nothing changes in the near term. The pilot applies to eligible participants, not the general public, and the tokenised and traditional versions of a share are functionally identical from the outside.
What changes is the infrastructure underneath, and the precedent above. The SEC has now said, formally, that blockchain settlement in US equity markets meets investor protection standards. That is the harder barrier to clear. Everything else is engineering.
