The SEC’s new approval of Nasdaq’s token framework marks a key turning point in how stocks might be traded in the future: it puts blockchain at the heart of U.S. stock markets, but on Wall Street terms.
The regulatory green light allows Nasdaq to test a system in which certain stocks and ETFs can be issued and settled as blockchain-based tokens while trading alongside traditional stocks. In practice, investors could hold tokenized versions of securities in digital wallets, with clearing and settlement handled by the Depository Trust & Clearing Corporation (DTCC).
However, this effort does not constitute a radical overhaul of market operations; rather, it focuses on post-exchange plumbing.
Brian Steele, director of DTCC, said the company aims to create “safe and secure tokenization services to advance a more resilient, inclusive, profitable and efficient financial system,” while working with exchanges and market participants to expand adoption.
Read more: Here’s why Nasdaq and the owner of the NYSE are putting the $126 trillion stock market on the blockchain
“The biggest beneficiaries”
One of the main reasons why Wall Street giants are turning to stock tokenization is that they can offer traders 24-hour trading.
Traditional equity markets operate on fixed trading hours and rely on multi-day settlement cycles. Creating stock tokens on blockchain rails offers the possibility of near-instant settlement and, potentially, around-the-clock trading.
Val Gui, chief executive of Kraken’s tokenized stocks platform xStocks, called the approval “a clear signal that the $126 trillion stock market will move on blockchain rails,” pointing to a future where ownership becomes “24/7 and global.”
“This builds on the SEC’s work with DTC, and that’s encouraging,” said Ian De Bode, president of tokenization company Ondo. “Progress toward 24/7 markets, even in a licensed form, is positive.”
“The biggest beneficiaries will be global investors… who have long lacked transparent, round-the-clock access to U.S. stocks,” he added.
In this regard, Nasdaq said it is tapping cryptocurrency exchange Kraken to distribute stock tokens globally.
Wall Street remains in control
However, the Nasdaq model does not replace the old financial system. It only extends it to on-chain titles.
Tokenized shares will still be traded through brokers and settled via DTCC, with blockchain primarily used as an alternative record of ownership.
“Nasdaq effectively limits the benefits of blockchain within the existing TradFi system. [traditional finance] stack,” said Maylea Ma, deputy general counsel at 1inch, a decentralized exchange (DEX) aggregator.
Investors might see faster settlement or more flexible ownership features, she said, but only under a permitted system that still relies on intermediaries.
“If tokenized stocks cannot connect to broader on-chain liquidity and non-custodial execution, the efficiency gains will be incremental rather than transformational,” Ma said.
“Always a step back”
Although this decision is a step toward the future of trade, the United States still lags behind other countries.
Jesse Knutson, head of operations at Bitfinex Securities, who has worked on token offerings in frontier markets like Kazakhstan and El Salvador, said the approval reflects regulatory progress but also highlights how far U.S. efforts still need to go.
“The flexibility of tokenization is what markets really want,” offering 24/7 trading, splitting, real-time settlement and the ability to self-custody, he said.
In places like the Astana International Financial Center (AIFC) in Kazakhstan and El Salvador, regulators have already permitted the issuance and trading of tokenized securities with fewer legacy constraints, including more direct investor access and blockchain-native settlement. Other hubs such as Switzerland and the United Arab Emirates have also moved more quickly to establish frameworks for the issuance and trading of digital assets, giving companies the opportunity to experiment.
“It’s an encouraging step…but it’s still a step backwards compared to more progressive jurisdictions,” Knutson said.
To be fair, US regulators oversee the world’s largest and most dominant stock market – worth around $62 trillion – which leaves less incentive and flexibility to overhaul existing systems in favor of new blockchain-based models. Any change must be part of a deeply embedded market structure, built around investor protection, intermediaries and centralized clearing.
But for now, the SEC’s decision suggests a clear direction: Tokenization is coming to the public markets, and it will be shaped, at least initially, by the same institutions and rules that define them today.
