SEC Approves Nasdaq Tokenized Securities Trading

The U.S. Securities and Exchange Commission (SEC) on March 18, 2026, approved a Nasdaq rule change that for the first time in history permits trading of securities in tokenized form on blockchain. The decision paves the way for integrating distributed ledger technology into the $126 trillion equity market and could fundamentally transform settlement mechanics on Wall Street.

What exactly the SEC approved

SEC Release No. 34-105047 allows Nasdaq market participants to opt into blockchain settlement for individual trades on a fully voluntary basis. The mechanism is straightforward: when submitting an order, the trader activates a special "tokenization flag" and provides their digital wallet address. The system then forwards this data to the Depository Trust Company (DTC), which handles clearing and settlement via blockchain.

Nasdaq filed for regulatory approval back in September 2025. After six months of review, the commission issued a decision that marks the first time in American history a traditional stock exchange has received official permission to conduct settlements through a distributed ledger. Trades without the tokenization flag continue to settle through the standard book-entry system.

Which assets are eligible for tokenization

The initial pool of eligible assets for tokenization covers three categories of financial instruments:

• Russell 1000 stocks: over a thousand of the largest U.S. public companies by market capitalization, including tech giants and industrial conglomerates
• S&P 500 ETFs: exchange-traded funds tracking the main U.S. stock market index
• Nasdaq 100 ETFs: funds tied to the index of the hundred largest technology companies

Crucially, tokenized shares are fully fungible with their traditional counterparts. They retain identical ticker symbols, CUSIP identification codes, voting rights, dividend access, and residual asset claims. From an investor rights perspective, there is no difference between a tokenized and a conventional share.

Settlement mechanism and DTC's role

The Depository Trust Company — the central securities depository of the United States — plays a key role in the new mechanism. DTC will handle clearing and settlement of tokenized trades under a pilot program authorized by a No Action Letter dated December 11, 2025. All existing Nasdaq infrastructure — order types, surveillance mechanisms, reporting requirements, and settlement timeframes — remains unchanged.

Both settlement methods — traditional and tokenized — operate on the same order book with identical execution priority, pricing, and market data treatment. This ensures that tokenization does not create liquidity fragmentation or affect execution prices.

Impact on the crypto market and institutional adoption

The SEC's decision came as part of a broader wave of regulatory changes in the U.S. financial system. On the same day, the commission together with the CFTC published joint guidance on crypto asset classification, establishing a systematic approach to integrating blockchain into traditional finance.

At the time of the announcement, Bitcoin was trading near $70,000, while the broader crypto market was in extreme fear territory with a Fear & Greed Index reading of 23. Despite short-term bearish sentiment, institutional interest in blockchain infrastructure continues to grow. Nasdaq has already partnered with crypto exchange Kraken for global distribution of tokenized stocks, while ICE — owner of the New York Stock Exchange — has invested in the OKX platform to launch crypto futures and tokenized assets.

Analysts note that Ethereum and other smart contract platforms could see additional demand as potential infrastructure for real-world asset (RWA) tokenization. The RWA sector is already one of the fastest-growing segments in the crypto industry, and Nasdaq's decision gives it a powerful institutional boost.

What's next: timeline and expectations

According to Nasdaq's estimates, the first blockchain-settled trades will take place by the end of Q3 2026 — after DTC completes system upgrades and qualified participants are onboarded. The specific blockchain network for the pilot project has not yet been announced.

A successful pilot could accelerate similar initiatives on other major exchanges. NYSE and CBOE are already developing their own blockchain solutions, while European and Asian venues are closely monitoring the American experience. Tokenization of the $126 trillion stock market is erasing the final boundaries between traditional finance and the crypto industry, paving the way for round-the-clock settlement, enhanced transparency, and global liquidity.