New York-based Nasdaq Exchange has gotten the green light to proceed with its pilot program for trading tokenized securities.
The SEC approval would allow the traditional exchange to test trading of the blockchain-based version of stocks under its Depository Trust Company (DTC) pilot program.
Both traditional stocks and these tokenized variants will trade on the same unified platform. The program will initially target high-volume ETFs and stocks.
This would include the constituents of the Russell 1000 Index (Apple, Microsoft, Nvidia, Amazon, etc.). Additionally, ETFs such as the S&P 500 and the Nasdaq-100 will fall within the early asset scope.
Community reactions
For ETF analyst Nate Geraci, the SEC approval would set the stage for a massive disruption by the tokenization boom.
For him, the writing is on the wall: the top regulator, the SEC, major exchanges (Nasdaq, NYSE), and the world’s largest asset managers (BlackRock and Fidelity) are all in on tokenization.
He added,
Tokenization will be as disruptive to asset management as ETFs were to mutual funds...Will basically be adapt or die a slow death.
Nasdaq initially sought SEC approval for tokenized stocks in September 2025. But its proposal was wholly different from the current tokenized securities on the market, such as xStocks offered by Kraken and Backed Finance.
Unlike most current offerings, including leveraged derivatives that grant holders no legal rights, Nasdaq pushed for its tokenized securities to have rights similar to those of investors holding traditional shares. And the SEC acknowledged this.
A tokenized share of a DTC Eligible Security must be fungible with, share the same CUSIP number and trading symbol with, and afford its shareholders the same rights and privileges as a share of an equivalent class of the traditional security for it to trade on Nasdaq.
Nasdaq’s tokenization plans
That said, the SEC’s green light will accelerate Nasdaq’s recent partnership with Kraken to distribute tokenized securities by xStocks.
This integration may likely be tied to the DTC pilot and eventually accord xStock holders similar legal rights as traditional shareholders.
The end goal? Ensure 24/7 trading and target large offshore users to gain access to the U.S. equity market.
And the appetite for these products is incredible. So far, the tokenized segment has crossed $1B, and over $300 million of the market cap was added in Q1 2026 alone.
Final Summary
- The approval of Nasdaq’s tokenized securities trading is a major unfolding disruption that would force other traditional players to pivot, per an ETF expert.
- SEC clarified that Nasdaq’s tokenized stocks and ETFs will offer similar rights as traditional securities.
