The SEC approved a rule change allowing Nasdaq to launch a pilot program for trading tokenized versions of major stocks and select index ETFs, a move that brings blockchain-based settlement into the core infrastructure of the U.S. equity market even as the broader crypto market shed 4.5% overnight and Bitcoin (BTC) slid 5.2% toward $70,000.
Tokenized Trading Pilot
The approval, filed as SR-NASDAQ-2025-072, permits Nasdaq to create digital representations of traditional shares that retain the same rights, ticker symbols and valuations as their conventional counterparts. The process routes through the Depository Trust & Clearing Corporation (DTC), meaning all tokenized trades remain within existing centralized clearing systems.
For traders, the change is largely invisible. When an order is flagged for tokenized settlement, Nasdaq relays it to the DTC; if the buyer's wallet and technology requirements are met, the trade settles on-chain.
If any issue arises, the system defaults to traditional settlement — a hybrid safeguard that keeps the clearinghouse in control. Nasdaq Executive Vice President Tal Cohen said issuers "should always remain at the center" of the ecosystem, a position that signals corporate governance will not be displaced by decentralized protocols.
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Why It Matters
The pilot addresses one of the most persistent inefficiencies in traditional finance: the one-to-two-day delay between trade execution and actual settlement, a lag that ties up billions of dollars daily. Tokenization could eventually enable near-instant settlement and around-the-clock trading, though the current program remains limited to standard market hours and clearinghouse schedules.
The approval also reflects a regulatory strategy.
With Congress facing deadlines on legislation like the CLARITY Act, the SEC appears intent on demonstrating it can modernize market structure within its existing authority — potentially to retain jurisdiction over tokenized assets before lawmakers intervene.
Crypto purists have noted that the DTC's closed-loop structure undermines the core promise of public blockchains: openness and permissionless access. Under this pilot, self-custody of tokenized equities through wallets like MetaMask is not an option.
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