SEC Clears Nasdaq to Launch Tokenized Securities Trading Pilot

Nasdaq has received approval from the U.S. Securities and Exchange Commission to move ahead with a pilot that will enable trading of tokenized versions of U.S. securities. Under the Depository Trust Company (DTC) pilot framework, Nasdaq will test blockchain-based representations of eligible stocks on the same integrated trading venue used for conventional shares. The initial universe is expected to focus on the most actively traded names, including major ETFs and large-cap equities such as constituents of the Russell 1000 (Apple, Microsoft, Nvidia, Amazon) as well as benchmark ETFs tied to the S&P 500 and the Nasdaq-100. Market reaction has been swift. ETF analyst Nate Geraci called the approval a major inflection point, arguing that tokenization could reshape asset management in the same way ETFs disrupted mutual funds. He said the momentum is clear across the ecosystem, pointing to the SEC, leading exchanges such as Nasdaq and NYSE, and large asset managers including BlackRock and Fidelity. Nasdaq first approached the SEC on tokenized equities in September 2025, but with a structure that differs from many tokenized products currently circulating in the market, including offerings such as Kraken's xStocks and Backed Finance's tokens. Nasdaq has emphasized that its tokenized securities should confer rights comparable to traditional share ownership. The SEC echoed that standard: for a tokenized share of a DTC-eligible security to trade on Nasdaq, it must be fungible with the traditional share, carry the same CUSIP number and trading symbol, and provide shareholders the same rights and privileges as the equivalent class of the underlying security. The approval is expected to speed up Nasdaq's work with Kraken to distribute tokenized securities via xStocks. The integration could be aligned with the DTC pilot, potentially bringing xStock holders closer to the legal protections associated with direct share ownership. Nasdaq's longer-term objective is to support around-the-clock trading and expand access for offshore investors seeking U.S. equity exposure. Interest in tokenized securities has been rising quickly: the category has surpassed $1 billion in total value, with more than $300 million in market capitalization added in Q1 2026 alone, according to DeFiLlama. In brief, the SEC's decision positions Nasdaq's tokenized securities initiative as a meaningful step toward mainstream adoption, while formalizing expectations that tokenized stocks and ETFs on the exchange must mirror traditional securities in rights and investor protections.