Nasdaq proposes trading tokenized securities by 2026, aiming to modernize U.S. markets while preserving investor protections and regulatory standards.
Nasdaq has taken a major step toward modernizing financial markets. The exchange has filed a proposal with the U.S. Securities and Exchange Commission (SEC). According to Reuters, this proposal would be able to trade tokenized securities on its main market, alongside traditional stocks and exchange-traded funds (ETFs).
Nasdaq Seeks SEC Nod to Launch Tokenized Securities by 2026
If the SEC approves the proposal, it would be the first time that tokenized securities are to be traded on a U.S. national exchange. The plan may come into effect as early as the third quarter of 2026.
Tokenized securities are digital forms of traditional financial assets. These tokens are logged and transferred across blockchain networks. Nasdaq aims to utilize tokenization without compromising existing investor protection. It believes this technology can make the markets more efficient while ensuring the safety of investors.
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Investor interest in tokenized assets is increasing worldwide. Many experts believe tokenization can help make financial markets more liquid and efficient. It could minimize costs and increase settlement times. Several large financial institutions are already investigating this notion. Some US banks are exploring tokenized bonds as well as stablecoins.
Nasdaq’s proposal makes it clear that tokenized securities are to provide the same rights as traditional ones. This includes shareholder voting, dividends, and transparency. The exchange warns against making separate or weaker rules for tokenised assets. It says this would hurt investor confidence and could lead to market confusion.
The introduction of Nasdaq’s proposal coincides with recent steps by U.S. regulators. The SEC recently signaled its willingness to keep abreast of rules to include blockchain-based financial products. Nasdaq expects this to be an important opportunity to modernize the way the U.S. markets operate.
Nasdaq Vows Full Shareholder Rights for Tokenized Trades
Unlike some platforms overseas that offer tokenized versions of U.S. equities that don’t include full shareholder rights, Nasdaq is going down a different route. It wants to maintain tokenized trades in the existing market order. This includes price discovery, investor protections, and full disclosure requirements.
Nasdaq also has a focus on scale and reliability. U.S. stock markets complete billions of trades each day. Any system that handles tokenized assets is required to live up to the same high standards. Nasdaq plans to use existing systems to manage the trading, clearing and settlement of these digital assets.
The exchange says it doesn’t want to create a fractured market. If different blockchains provide different versions of the same assets, prices could differ and transparency could suffer. Nasdaq doesn’t want to have such confusion when tokenized assets are kept under one roof.
This proposal stands to be a turning point in the way U.S. investors relate to digital finance. Tokenized securities could be the bridge to unite the best of the traditional market and blockchain innovation. However, the SEC has to carefully examine the proposal to make sure all rules are abided by.
In conclusion, Nasdaq is marching ahead with a gutsy plan. It wants to combine traditional market structure and new digital technology. If successful, the move could result in a more efficient and modern financial system. This proposal could mark the beginning of the new trading age.
