US SEC approves Nasdaq pilot for tokenized stock trading…on-chain shift in traditional finance accelerates

The US Securities and Exchange Commission (SEC) has approved Nasdaq’s pilot program for tokenized stock trading.

According to The Block on the 18th (local time), the SEC approved a rule change, enabling Nasdaq to support trading in tokenized shares.

The pilot program will be run by the Depository Trust Company (DTC), a subsidiary of the Depository Trust & Clearing Corporation (DTCC), allowing participating institutions to settle stock trades in token form instead of through conventional processes.

Tokenized shares will trade on the same order book as traditional shares, with the same execution priority applied. Shareholder rights will also be guaranteed on the same basis as for conventional shares.

While maintaining that tokenized securities remain subject to existing securities laws, the SEC is pursuing policies to gradually expand adoption of related technologies.

The move is seen as a concrete step toward migrating traditional financial-market infrastructure to a blockchain-based framework. Until now, tokenized stocks have largely been offered only on a limited basis outside the US, but the approval has launched a more formal experiment within regulated US markets.

Previously, in December last year, the SEC approved DTCC’s pilot to tokenize certain assets on blockchain. The New York Stock Exchange (NYSE) is also reviewing the introduction of a tokenized securities trading and settlement platform.

SEC Chair Paul Atkins stressed that “we must establish a clear regulatory foundation to foster innovation and make the financial system more efficient and resilient.”

Still, some in traditional finance have raised concerns that blockchain-based securities trading will require tighter regulatory safeguards. The specific duration of the pilot program was not disclosed.