Nasdaq seeks SEC approval to tokenize all assets on the exchange

With companies like BlackRock driving significant growth in the tokenization space, the American exchange Nasdaq is ready to capitalize on this development, working with U.S. authorities to facilitate the trading of tokenized securities.

Nasdaq's vision to transform traditional financial services

In a recent post on LinkedIn, the president of Nasdaq, Tal Cohen, emphasized the potential of integrating tokenization and blockchain technology with the traditional market infrastructure.

He highlighted that this merger could provide substantial advantages for issuers, investors, and the economy in general, reducing friction in transactions, speeding up settlement times, automating processes, and improving efficiency in capital and collateral management.

As part of this effort, Nasdaq submitted a request to the U.S. Securities and Exchange Commission (SEC) to allow the trading of tokenized securities on its platform.

Cohen recognized the potential of blockchain technology to introduce new post-trade processes, modernize proxy voting, and create programmable methods to manage corporate actions.

The growth of decentralized finance (DeFi) has provided valuable insights into how essential financial services — such as lending, trading, and settlement — can operate differently to deliver value.

However, Cohen also highlighted the risks associated with rapid advancements. He emphasized the importance of incorporating governance and investor protection from the outset to ensure that the benefits of innovation can be fully realized.

First transactions settled by tokens by the end of 2026?

The recent request from Nasdaq is seen as a fundamental step in its journey to responsibly incorporate digital asset technology into the U.S. stock markets. The proposal aims to integrate new capabilities into the existing financial system, further enhancing the efficiency and reliability of these markets.

If the SEC approves Nasdaq's proposal, it would represent the first instance of tokenized securities being traded on a major U.S. stock exchange, marking a significant milestone in the integration of blockchain-based settlement into the national market system.

Notably, the largest cryptocurrency exchange in the US has also sought approval from the regulatory agency to offer "tokenized shares" to its users, while major banks like Bank of America and Citi have expressed interest in exploring tokenized assets.

Once the Nasdaq proposal is implemented and the necessary infrastructure of the central clearing agency is operational, investors could potentially buy shares on the Nasdaq that are settled in the form of tokens, all without changing the current processes of order routing, pricing, surveillance, or reporting.

Nasdaq predicts that investors in the U.S. may witness the first tokenized trades by the end of the third quarter of 2026, depending on the readiness of the Depository Trust Company's infrastructure.

Honestly, I think that this mass tokenization can democratize access to markets, but I am also concerned about how this will affect regulatory oversight. I am not convinced that investor protections will be sufficient when everything is tokenized. And you? Do you really believe that this technology will bring more efficiency or is it just another way for Wall Street to extract value from small investors?