Nasdaq Seeks SEC Approval for Full Asset Tokenization on Exchange

Revolutionizing Traditional Markets Through Blockchain Integration

Nasdaq President Tal Cohen recently outlined the company's strategic vision for integrating blockchain technology with traditional market infrastructure in a detailed LinkedIn post. This initiative represents a significant advancement in the evolution of digital asset technology within regulated financial markets.

Cohen highlighted several key advantages that tokenization could deliver to the financial ecosystem:

• Transaction friction reduction through streamlined settlement processes
• Accelerated settlement cycles improving capital efficiency
• Process automation reducing operational costs and errors
• Enhanced capital and collateral management capabilities

As part of this forward-looking strategy, Nasdaq has formally submitted a regulatory filing to the Securities and Exchange Commission (SEC) requesting approval to list and trade tokenized securities on its platform—a move that aligns with recent SEC developments toward greater blockchain integration in financial markets.

Cohen specifically acknowledged blockchain technology's potential to transform critical market functions, including:

1. Modernizing post-trade processes
2. Enhancing proxy voting mechanisms
3. Creating programmable methods for managing corporate actions

The filing comes at a time when decentralized finance (DeFi) has demonstrated alternative approaches to core financial services like lending, trading, and clearing—providing valuable insights that traditional exchanges are now seeking to incorporate.

However, Cohen emphasized a measured approach to innovation, stressing the importance of robust governance frameworks and investor protection measures. This balanced perspective reflects the growing consensus among financial institutions that blockchain adoption must proceed with appropriate regulatory oversight.

Targeted Timeline: First Tokenized Securities by Q3 2026

Nasdaq's proposal represents a carefully considered approach to digital asset integration within the U.S. equities markets. Rather than disrupting existing market structures, the proposal aims to enhance the current system by incorporating blockchain capabilities into the established financial framework.

If approved by the SEC, this would mark a historic milestone as the first major U.S. stock exchange to offer tokenized securities trading. This development follows the SEC's recent initiatives to harmonize cryptocurrency regulations and integrate blockchain technology into traditional markets, as evidenced by their recent approvals for blockchain-based trading systems.

Industry momentum is building around tokenization, with a prominent regulated cryptocurrency exchange also seeking similar SEC approval for offering tokenized equities to its users. Additionally, major financial institutions including Bank of America and Citi have expressed interest in exploring tokenized asset classes.

The implementation strategy allows for a seamless transition, as investors would be able to purchase shares on Nasdaq that settle in token form while maintaining all current processes for order routing, pricing, surveillance, and reporting—minimizing disruption while maximizing technological benefits.

According to Nasdaq's projected timeline, U.S. investors could see the first token-settled trades as early as the third quarter of 2026. This timeline is contingent upon the development and deployment of supporting infrastructure by the Depository Trust Company, highlighting the collaborative nature of this market evolution.

The regulatory filing underscores Nasdaq's commitment to technological advancement while working within established regulatory frameworks to ensure market integrity and investor protection remain paramount throughout this transformation.