Written by: 0xjs@ Jinse Finance
On September 8, 2025, Nasdaq announced that it had submitted a document to the U.S. SEC to facilitate the trading of tokenized securities on the Nasdaq stock market.
This marks the first time a national US exchange has taken the initiative to tokenize US stocks. Here are 10 questions to understand Nasdaq's latest proposal for tokenizing its stock.
1. What is Nasdaq going to do?
On September 8, Nasdaq filed a proposed rule change with the U.S. Securities and Exchange Commission (SEC) to allow its member firms and investors to tokenize equity securities and exchange-traded products (ETPs) traded on the Nasdaq Stock Market. This move aims to promote financial innovation while maintaining market stability, fairness, and investor protections. Specifically, the filing provides a concise and clear approach to ensuring that tokenized securities can be traded within existing U.S. stock market rules. This forward-looking rule proposal serves as a framework for open and transparent communication with the SEC and other industry stakeholders.
2. Why should tokenized securities trading be conducted under the current framework?
Existing market rules are designed to safeguard market liquidity and help maintain competition, transparency, and fairness in the U.S. equity market, thereby driving economic growth. Nasdaq's proposed approach is designed to maintain cross-market connectivity and competitiveness, ensuring investor protection and capital formation mechanisms are not compromised. Incorporating tokenized securities into this established framework will not only deliver tangible benefits but also continue to advance the leading position of the U.S. equity market globally.
3. What changes should be made to the current system?
The current market system can accommodate tokenized securities trading without significant change or restructuring. Traditional stocks and tokenized shares share the same Uniform U.S. Securities Identifier (CUSIP), providing shareholders with identical substantive rights and benefits. Both forms of stock will trade on the same Nasdaq order book, with the same execution priority. Fundamentally, there are no differences between the two during the transaction lifecycle. If transaction participants choose tokenized settlement, the shares will be tokenized during the settlement process.
4. When is the expected launch of tokenized securities trading?
Only after the SEC approves the proposal will the company collaborate with relevant industry stakeholders to implement it within a reasonable timeframe to ensure market stability, fairness, and investor protection. The specific timing of trading launch will depend on the progress of these processes.
5. Do tokenized securities support 24-hour trading?
To ensure the core principles of market fairness, integrity, and resilience remain unshaken, trading hours for tokenized securities will be consistent with those for traditional securities, in line with Nasdaq’s 24-hour trading schedule.
6. Compared with the current securities trading model, what are the advantages of tokenization?
Nasdaq's proposal will enable listed securities to be tokenized and traded under the rules and protections of one of the world's leading, most trusted, and most liquid markets. This approach will clarify the path forward for tokenized securities and prevent further fragmentation of market liquidity. Furthermore, it will establish a platform for future innovations, such as faster and more efficient settlement, flexible collateral transfer, and expanded market access.
7. If the issuer does not wish to be tokenized, can they choose to exit?
The proposal is subject to public comment and review by the U.S. SEC, and the final rule will depend on the SEC's decision. Nasdaq believes that any regulatory response should prioritize issuer feedback to ensure a unified and consistent implementation standard across the U.S. stock market.
8. How does Nasdaq ensure that tokenized securities enjoy the same rights and protections as traditional stocks?
Tokenized securities traded on Nasdaq, as equivalent to traditional securities, will be subject to the same market rules, protections, and regulatory oversight as traditional securities. Shareholders' voting rights, ownership rights, and investor protections will remain unchanged.
9. Who tokenizes securities?
The filing document clarifies a simple operational plan: customers can choose to complete transaction clearing and settlement in the form of tokens through the Depository Trust Company (DTC), thereby tokenizing the trading securities they hold.
10. How will market data for tokenized securities be published?
Under current market regulations, tokenized securities traded on Nasdaq will utilize the same pricing and pre-trade data infrastructure as traditional securities. No separate data feeds or pricing mechanisms will be established for tokenized securities; all pricing information will continue to be distributed through Nasdaq's existing proprietary data feed system, ensuring uncompromising market transparency. The public blockchain provides a traceable and auditable record of all transactions involving security tokens. Issuers and investors can trace the ownership history of securities by querying smart contract addresses and related transaction records.
