The SEC’s new approval of Nasdaq’s tokenized securities framework marks a key turning point in how stocks could trade in the future: bringing blockchain to the core of the US stock markets, but on Wall Street’s terms.
The regulatory green light allows Nasdaq to test a system in which certain stocks and ETFs can be issued and settled as blockchain-based tokens while trading alongside traditional stocks. In practice, investors could hold tokenized versions of securities in digital wallets, with clearing and settlement handled by the Depository Trust & Clearing Corporation (DTCC).
However, the effort is not a radical overhaul of market operations; rather, it focuses on post-trade plumbing.
DTCC executive Brian Steele said the company aims to create “secure tokenization services to promote a more resilient, inclusive, profitable and efficient financial system,” while working with exchanges and market participants to scale adoption.
Read more: Here’s why Nasdaq and NYSE owner are putting the $126 trillion stock market on blockchain
‘The biggest beneficiaries’
One of the main reasons why Wall Street giants are adopting stock tokenization is that they can offer traders 24-hour trading.
Traditional stock markets operate within fixed trading hours and are based on multi-day settlement cycles. Creating stock tokens on blockchain rails provides the possibility of near-instant settlement and eventually 24-hour trading.
Val Gui, CEO of Kraken’s tokenized stock platform xStocks, called the approval “a clear sign that the $126 trillion stock market will move onto the blockchain rails,” pointing to a future in which stock ownership becomes “24/7 and global.”
“This builds on the SEC’s work with DTC, and is encouraging,” said Ian De Bode, president of tokenization firm Ondo. “Progress toward 24/7 markets, even on a sanctioned basis, is positive.”
“The biggest beneficiaries will be global investors… who have long lacked smooth, ongoing access to U.S. stocks,” he added.
For that connection, Nasdaq said it is turning to cryptocurrency exchange Kraken to distribute stock tokens globally.
Wall Street remains in control
Still, the Nasdaq model does not replace the old financial system. It only extends it to string values.
Tokenized shares will continue to be traded through brokers and settled through DTCC, and blockchain will primarily be used as an alternative record of ownership.
“Nasdaq is effectively ring-fencing the benefits of blockchain within existing TradFi [traditional finance] stack,” said Maylea Ma, deputy general counsel at 1inch, a decentralized exchange (DEX) aggregator.
Investors may see faster settlement or more flexible ownership features, he said, but only within a licensed system that still relies on brokers.
“If tokenized stocks cannot connect to broader on-chain liquidity and non-custodial execution, the efficiency gains will be incremental rather than transformational,” Ma said.
“We are still one step behind”
While the move is a step toward the future of trade, the United States still lags behind other jurisdictions.
Jesse Knutson, chief operating officer at Bitfinex Securities, who has worked on token issuances in frontier markets such as Kazakhstan and El Salvador, said the approval reflects regulatory progress but also highlights how far efforts still need to go in the United States.
“The flexibility of tokenization is what markets really want,” offering 24/7 trading, fractionalization, real-time settlement and the ability for self-custody, he said.
In places like the Astana International Financial Center (AIFC) in Kazakhstan and El Salvador, regulators have already allowed tokenized securities to be issued and traded with fewer legacy restrictions, including greater direct access to investors and native blockchain settlements. Other centers, such as Switzerland and the United Arab Emirates, also moved faster to establish frameworks for the issuance and trading of digital assets, giving companies room to experiment.
“It’s an encouraging move … but it’s still a step back from more progressive jurisdictions,” Knutson said.
To be fair, US regulators oversee the world’s largest and most dominant stock market (worth about $62 trillion), leaving less incentive and flexibility to reform existing systems in favor of newer blockchain-based models. Any changes must fit within a deeply entrenched market structure built around investor protection, intermediaries and centralized clearing.
But for now, the SEC’s decision suggests a clear direction: Tokenization is coming to public markets and will be shaped, at least initially, by the same institutions and rules that define them today.
