Nasdaq's securities on the blockchain are not as radical as you think.
Written by: KarenZ, Foresight News
On March 18, 2026, the U.S. Securities and Exchange Commission (SEC) issued an order approving the revised proposal for tokenized securities trading rules by Nasdaq, allowing certain securities to be traded in tokenized form on the exchange.
This document quietly rewrote a rule that had been in place for over half a century: from now on, certain securities on Nasdaq can be traded and settled in token form.
Laying the foundation: By December 2025, DTCC received clearance from the SEC.
All discussions about tokenized stocks must start with a key player: the U.S. Depository Trust Company (DTCC) subsidiary, the Depository Trust Company (DTC).
DTC is the 'central repository' of the U.S. securities market, holding over $100 trillion in securities, with the vast majority of stocks listed in the U.S. recorded in its books. If tokenization is to enter the mainstream market, it cannot bypass DTC.
On December 11, 2025, the SEC's Division of Trading and Markets sent a 'no-action letter' to DTC: if DTC operates the tokenization pilot as described in the application, the SEC will not initiate enforcement action. This is not legislation, but in U.S. regulatory practice, the effectiveness of a no-action letter is sufficient to drive market action.
DTC's plan is logically a 'parallel track' design. Under the traditional model, securities rights are recorded in DTC's centralized ledger; under the tokenization model, DTC mints tokens using its own 'Factory' system on the blockchain, and these tokens represent the 'tokenized entitlements' to the corresponding stocks. The underlying stocks are still held by DTC's 'Cede & Co.' and remain unchanged, only adding an on-chain 'receipt.'
DTC's own software system LedgerScan will track every token transfer, ensuring that on-chain records always correspond to DTC's internal ledgers. 'Double spending' is mechanically blocked—DTC has specifically set up a 'Digital Omnibus Account': once assets are tokenized, the corresponding amount is locked in that account until the tokens are 'burned' and then released.
The pilot scope has strict boundaries: limited to Russell 1000 index constituents, U.S. Treasury bonds, and ETFs tracking the S&P 500 and Nasdaq 100. These are the most liquid assets—if problems arise, the market impact is relatively controllable. The pilot will last for three years, during which DTC must submit detailed reports to the SEC quarterly, and the SEC reserves the right to modify or revoke the no-action letter at any time.
Nasdaq's move: the same order book, two settlement tracks
With the infrastructure in place, the exchange's rules must also keep up.
On March 18, 2026, the SEC approved Nasdaq's submitted rule change application (SR-NASDAQ-2025-072), allowing some securities to be traded in tokenized form at the Nasdaq Market Center, applicable to DTC pilot connections, limited to Russell 1000 constituents and ETFs tracking the S&P 500 and Nasdaq 100.
The core of Nasdaq's rule modification has four key points:
Redefining 'securities': Nasdaq's rules clearly state that securities can exist in traditional forms (digital ownership records without blockchain technology) or tokenized forms (digital ownership records utilizing blockchain technology). Both belong to the same security.
Add a 'tokenization flag': DTC qualified participants can choose a 'tokenization flag' when entering orders, declaring their desire for this transaction to be settled in a tokenized form. The flagged content may also include: the blockchain network chosen by the participant and the registration wallet address for receiving tokens.
The same order book, the same execution priority: the tokenized version and the traditional version of the same stock are matched on the same order book, executed with the same priority. The prices are the same, the CUSIP numbers are the same, the codes are the same, and the shareholder rights (voting rights, dividends, liquidation distribution rights) are completely identical.
Retain tokenization instructions when routing across venues: if Nasdaq routes an order to be executed at another exchange, the tokenization preference will also be passed on to DTC for processing.
So, can this tokenized security be traded 7×24 hours? Is the settlement cycle real-time?
No, the answers to both questions are negative.
The trading hours and settlement cycles for tokenized securities are completely consistent with existing exchange rules, not extending to 7×24, still subject to Nasdaq's existing trading hour arrangements and T+1 settlement mechanism. After Nasdaq's matching engine completes the matching, it passes the tokenization preference as an instruction to DTC, which executes the tokenization process.
In other words, Nasdaq's tokenization plan at this stage is to insert a 'tokenization option' within the existing T+1 settlement framework, allowing participants to choose to receive settled securities rights in token form.
As for the vision of 7×24 hours, that is the goal for the next phase.
Nasdaq × Kraken: Proposed stock token framework to launch in 2027
Just about 10 days before the SEC approved Nasdaq's rule change, on March 9, 2026, Nasdaq announced a partnership with Kraken's parent company Payward to jointly develop the 'Equity Transformation Gateway,' with the underlying infrastructure provided by Kraken's xStocks framework.
This collaboration line and the DTC pilot are two different paths, but their goals are complementary.
The DTC pilot follows an 'indirect tokenization' route: DTC is responsible for minting and custody, while stocks continue to be held by Cede & Co. Tokens represent a certificate of entitlement to this portion of equity, rather than direct ownership. Token holders are indirect beneficiaries of Cede & Co.'s holdings and are not direct shareholders under the law.
Nasdaq's collaboration with Kraken follows a 'issuer-led direct tokenization' route: listed companies directly issue on-chain versions of stocks, with blockchain records integrated into the issuer's official shareholder registry. Transferring tokens is legally equivalent to transferring the stocks themselves, and token holders are registered shareholders in the true sense.
Another way for the NYSE
On the other hand, the New York Stock Exchange (NYSE) has chosen a more aggressive path: to directly build a new platform.
In January 2026, the NYSE announced that it is developing a brand new tokenized securities trading and on-chain settlement platform, aiming to create a 7×24 hour operation, instant settlement, support for stablecoin deposits and withdrawals, and allow orders to be placed in dollar amounts (i.e., split trades), while being compatible with multiple blockchain settlement and custody.
This new platform will leverage the existing Pillar matching engine of the NYSE, integrating a blockchain-based post-trade system, and will support two types of assets: tokenized stocks that are interchangeable with traditional stocks, and native digital securities.
On March 5, 2026, the NYSE's parent company ICE took another step: making a strategic investment in the cryptocurrency exchange OKX at a valuation of $25 billion and obtaining a seat on the OKX board. According to both parties' announcements, OKX will provide its global users access to ICE futures products and NYSE tokenized stocks, with integration expected to launch in the second half of 2026 (subject to regulatory approval). ICE will also authorize the use of OKX's spot cryptocurrency price data to launch compliant U.S. cryptocurrency futures products.
Summary
The strategic similarities and differences between the two exchanges reflect a real ideological struggle within the industry.
Nasdaq's current plan is to retain the existing infrastructure, allowing tokenization to connect as a parallel track, with DTC remaining the clearing center and the T+1 settlement rhythm unchanged. At the same time, Nasdaq is also developing a stock token framework in collaboration with Kraken.
The NYSE's plan is much more aggressive: to build a new venue where stablecoin payments are made, allowing for trading around the clock, essentially rewriting the entire logic.
Which plan is more suitable for institutions and which plan attracts retail investors will be answered by the market. However, in the U.S. capital market of 2026, these two races have already started simultaneously.