Key Insights:
- Nasdaq filed a proposal with the SEC to allow trading of tokenized securities alongside traditional stocks on its leading market platform.
- The move would mark the first instance of tokenized securities trading on a major US stock exchange under national market system protections.
- Tokenized stock market cap grew 43.3% in 2025 to surpass $420 million, primarily driven by xStocks’ launch on Solana, reaching $62 million.
Nasdaq filed a proposal with the US Securities and Exchange Commission (SEC) on Sept. 8 to introduce tokenized securities trading on its platform.
As Reuters reported, the proposal sought SEC approval to modify Nasdaq’s rules allowing trading of listed stocks and exchange-traded products on its primary market in “either traditional digital or tokenized form.”
The filing positioned Nasdaq as the first major US stock exchange to pursue formal regulatory approval for tokenized securities trading.
The Sept. 8 submission followed the SEC’s recent rulemaking agenda announcement, which included potential amendments allowing crypto trading on national securities exchanges and alternative trading systems.
Under SEC Chair Paul Atkins, the agency pursued revamped cryptocurrency regulations aimed at reducing rules that Wall Street criticized as overly burdensome.
Tokenized Securities Market Experiences Rapid Growth
The tokenized securities sector expanded significantly throughout 2025, with market capitalization growing 43.3% to surpass $420 million according to rwa.xyz data.
Much of this growth stemmed from xStocks’ official launch on Solana on June 30, which reached approximately $62 million in size within months of deployment.
Nasdaq’s proposal emerged amid rising global investor demand for tokenized assets.
Proponents argued that tokenization improved liquidity in financial systems through reduced settlement times and enhanced trading accessibility.
Major financial institutions, including Bank of America and Citi, are exploring launching tokenized assets, including stablecoins.
Coinbase, the largest US crypto exchange, previously sought SEC permission to offer “tokenized equities” to customers.
The convergence of traditional finance and blockchain technology accelerated under President Donald Trump’s administration, easing crypto regulations and creating opportunities for established market operators to embrace digital asset innovation.
Exchange Industry Previously Opposed Tokenized Stock Proliferation
The Nasdaq proposal contrasted sharply with recent industry opposition to tokenized securities.
The World Federation of Exchanges (WFE) sent a letter to three regulatory bodies in late August, expressing concern that tokenized stocks “mimic” equities without providing equivalent rights or trading safeguards.
The WFE letter, submitted to the SEC’s Crypto Task Force, European Securities and Markets Authority, and IOSCO’s Fintech Task Force, stated alarm over “the plethora of brokers and crypto-trading platforms offering or intending to offer so-called tokenised US stocks.”
The organization argued these products were “marketed as stock tokens or the equivalent to stocks when they are not.”
Platforms including Robinhood and Coinbase faced criticism for pursuing tokenized equity offerings.
Robinhood launched tokenized equities for EU customers in June and planned to issue tokens representing shares in privately-held companies, including OpenAI. OpenAI responded by stating it did not endorse the tokens and was not involved in the offering.
The WFE warned that stock issuers could suffer reputational damage if tokens failed and called for the application of securities rules to tokenized assets, clearer legal frameworks for ownership and custody, and the prevention of marketing tokens as stock equivalents.
Nasdaq Proposes Enhanced Investor Protections
Nasdaq’s proposal addressed exchange industry concerns by establishing stricter standards for tokenized securities.
The exchange argues that the tokenized securities must possess “the same material rights and privileges as do traditional securities of an equivalent class” to qualify for trading on its platform.
Under Nasdaq’s framework, qualifying tokenized securities would trade alongside traditional securities “on the same order book and according to the same execution priority rules.”
The exchange explicitly stated it would not treat tokenized instruments as equivalent to traditional counterparts unless they conveyed full rights “in whole or in material part.”
The proposal noted maintaining national market system benefits and protections while accommodating tokenization.
Further, Nasdaq argued “wholesale exemptions from the national market system and related protections are neither necessary to achieve the goal of accommodating tokenization, nor are they in investors’ best interests.”
If approved and once the central clearing agency infrastructure becomes operational, investors could purchase shares on Nasdaq and receive settlement in token form without changing order routing, pricing, surveillance, or reporting processes.
Nasdaq projected that US investors could see the first token-settled securities trades by the third quarter of 2026, assuming the Depository Trust Company infrastructure deployment.
The proposal reflected broader industry momentum toward blockchain integration while addressing regulatory concerns about investor protection and market integrity in the evolving tokenized securities landscape.