The U.S. Securities and Exchange Commission approved Nasdaq’s proposed rule change to enable trading of securities in tokenized form, clearing the way for a tokenization trading trial tied to a pilot program run by the Depository Trust Company. The approval, issued on March 18, 2026, marks one of the most concrete steps a major U.S. exchange has taken toward integrating blockchain-based asset representation into regulated market infrastructure.
The SEC’s order, Release No. 34-105047, approved Nasdaq’s amended rules under filing SR-NASDAQ-2025-072. The approval does not amount to a broad, immediate rollout of tokenized stock trading. It authorizes a framework that will operate during the pendency of DTC’s tokenization pilot, with participation limited to DTC-eligible firms and a defined set of securities.
KEY TAKEAWAYS
- The SEC approved Nasdaq’s tokenization trading framework on March 18, 2026, tied to a DTC pilot program, not a full public launch.
- Eligible securities are initially limited to Russell 1000 stocks and certain major-index ETFs tracking benchmarks like the S&P 500 and Nasdaq-100.
- Tokenized and traditional shares will trade on the same order book with identical execution priority and T+1 settlement.
What the SEC Approved in Nasdaq’s Tokenization Trial
Nasdaq originally filed the proposal on September 8, 2025. The SEC published the initial notice on September 16, 2025, then instituted proceedings on December 12, 2025 to evaluate whether the rule change should be approved or disapproved. The final approval came after Nasdaq submitted Amendment No. 2 to address the commission’s concerns.
The approved framework allows tokenized versions of securities to trade on the Nasdaq exchange alongside their traditional counterparts. Both versions share the same order book and receive the same execution priority, a design choice that keeps tokenized assets inside existing U.S. market structure rather than creating a parallel system.
Settlement remains on a T+1 basis, the same cycle used for conventional equity trades. The trial does not introduce instant or same-day settlement for tokenized securities, a distinction that separates the approved program from some of the more ambitious visions floated in crypto and fintech circles.
Only DTC-eligible participants can access the tokenization pathway. The initial universe of eligible securities is limited to components of the Russell 1000 index at the time of service launch, plus certain exchange-traded funds tracking major indices such as the S&P 500 and Nasdaq-100. Additional securities may be added over time.
How Nasdaq’s Tokenization Trading Program Is Expected to Work
Tokenization, in this context, means representing existing securities as digital tokens on blockchain infrastructure while maintaining full integration with traditional exchange and clearing systems. A tokenized share of a Russell 1000 company would carry the same economic rights and trade on the same Nasdaq order book as its conventional equivalent.
The program depends on DTC’s tokenization pilot, which operates under a December 11, 2025 SEC staff no-action letter. That letter provides regulatory relief for DTC’s preliminary tokenization service, with the relief set to expire three years after DTC launches the base version of its platform. If DTC does not build out the required post-trade infrastructure, the Nasdaq framework has no rails to run on.
Commissioner Hester Peirce, who has consistently advocated for regulatory clarity around digital assets, described the DTC program as a pilot and “a significant incremental step in moving markets onchain.” Her framing underscores that this is an evolutionary move within existing regulatory boundaries, not a revolutionary departure from them. Peirce has also weighed in on how the SEC should approach the securities classification of digital assets like NFTs, reinforcing her role as a leading voice on crypto policy within the commission.
Matt Savarese, speaking on Nasdaq’s approach, put it plainly: “We’re not looking at upending the system.” The intent is to layer tokenization onto proven exchange infrastructure rather than replace the plumbing underneath.
Why the SEC Decision Matters for Crypto Markets and Traditional Finance
The approval is significant because it places tokenized securities trading inside the regulatory perimeter of a major U.S. stock exchange. Previous tokenization efforts in the U.S. have largely operated through exemptions, alternative trading systems, or offshore platforms. Nasdaq’s framework, by contrast, runs through the SEC’s standard self-regulatory-organization rulemaking process.
For institutional players, the signal is that tokenized trading can coexist with existing compliance, surveillance, and settlement infrastructure. Firms already connected to DTC and Nasdaq would not need to adopt entirely new systems to participate. This lowers the barrier to entry compared to standalone blockchain-based exchanges that require separate onboarding and custody arrangements.
The approval arrives during a period of broader regulatory recalibration. The Federal Reserve’s decision to hold interest rates steady at its March meeting reflects ongoing economic uncertainty, and financial institutions are watching how regulators across agencies approach innovation in market structure. The SEC’s willingness to approve a tokenization trial on Nasdaq, even a constrained one, may encourage other exchanges and clearinghouses to pursue similar proposals.
Traditional finance firms exploring blockchain-based settlement and custody, including those already active in crypto-adjacent business lines like Bitcoin rewards programs, now have a concrete regulatory precedent to point to when evaluating tokenization strategies.
The constraints matter as much as the approval itself. The trial is limited to a subset of large-cap equities and major-index ETFs, not the full universe of listed securities. Participation requires DTC eligibility. The three-year window on the no-action letter means the program operates on a defined timeline, not an open-ended mandate. And the entire structure depends on DTC successfully deploying its post-trade tokenization infrastructure.
None of this guarantees that tokenized securities trading will scale across U.S. markets. What it does establish is a regulated, observable test case. If the pilot runs without disruption, it gives the SEC, exchanges, and clearinghouses data to evaluate whether broader adoption makes sense. If problems emerge, the narrow scope limits the blast radius.
The next milestones to watch are DTC’s infrastructure launch timeline and the first trades executed under the new framework. Until those happen, the approval remains a legal green light waiting for the road to be built.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
