Original Title: Q&A: Nasdaq's New Proposal for Tokenized Securities
Original Source: Nasdaq Newsroom
Original Translation: BitpustNews
A revolution in blockchain integration led by traditional financial giants is unfolding rapidly.
On September 8, 2025, Nasdaq submitted a landmark proposal to the U.S. Securities and Exchange Commission (SEC) seeking approval for its members and investors to trade tokenized equity securities and exchange-traded products (ETPs) on the exchange. This means that stocks of leading companies like Apple and Microsoft will be able to be traded and settled in the form of blockchain tokens on Nasdaq in the future.
"We are not looking to replace the existing system, but rather to provide the market with another more efficient and transparent technological option," said Chuck Mack, Senior Vice President of Nasdaq North America Markets, in an exclusive interview. "Tokenized securities are simply the same assets expressed in a new form on the blockchain."
Below is the full interview with Chuck Mack, providing a detailed explanation of how this proposal works, why it is being launched, and how it could change the way everyone invests.
In simple terms, what does Nasdaq hope to achieve with this application submitted to the SEC?
Chuck Mack: The proposed rule change by Nasdaq will enable member firms and investors to trade tokenized versions of equity securities and exchange-traded products (ETPs) on our market. Our goal is to integrate digital assets into Nasdaq's current infrastructure and systems, thereby promoting financial innovation while maintaining stability, fairness, and investor protection.
Specifically, the application provides a clear method for allowing tokenized securities trading under the existing regulatory framework, utilizing the Depository Trust Company (DTC) for trading clearance and settlement in token form.
Here’s how it works: a security can be traded on Nasdaq in either traditional or tokenized form.
- The traditional form is a digital representation of ownership and rights, but does not use distributed ledger or blockchain technology.
- The tokenized form is a digital representation of ownership and rights that uses distributed ledger or blockchain technology.
When placing an order, participants can choose to clear and settle in either the conventional form or the tokenized form, and the exchange will communicate the participants' instructions to the DTC. All stocks will be traded on Nasdaq according to the same order input and execution rules, with the same identification number (CUSIP) as traditional stocks, granting holders the same rights and benefits.
To backtrack a bit, what exactly are tokenized securities?
Chuck Mack: There are two components here: tokens and securities.
In this context, a token is a digital representation of any asset created and recorded on the blockchain—this data storage method was initially popularized by Bitcoin. This could include coins like Bitcoin itself, or tokens pegged to the U.S. dollar, such as the stablecoin Tether (USDT), or it could represent ownership or any other form of rights based on the blockchain.
Meanwhile, a security is a tradable financial asset that represents ownership or a debt claim in a company—such as stocks or bonds.
Therefore, tokenized securities are representations of these traditional financial instruments that have been recorded on a blockchain or other distributed ledger technology.
From our perspective, it is important to emphasize that while tokenized securities are technically different from those currently traded on the Nasdaq market, under our proposal, they still represent the same value storage as their traditional counterparts.
After all, we live in a digital world. Today's stocks and other securities are represented and recorded digitally, so tokenization is simply a different way of digitally representing assets.
What key details should ordinary investors know about the Nasdaq proposal?
Chuck Mack: Fundamentally, we propose to utilize the existing infrastructure of the U.S. market to facilitate tokenized securities trading.
There is significant demand for securities traded on Nasdaq globally, and this tokenization technology has sparked emerging interest. What we are proposing is an integration capability that allows market participants to use the systems they are already familiar with and trust to obtain a tokenized digital representation of securities.
The proposed rule change will give investors a choice: to choose whether they want to represent the stocks or ETPs they wish to trade in tokenized form or traditional digital form. If they choose the tokenized method, then the DTC will handle the backend work to clear and settle the transaction, recording the asset as a blockchain-based token.
It is important to note that this trading will still occur under the existing federal regulations of the SEC, ensuring fair and orderly trading.
This is a key point in our application: existing U.S. rules do not exclude different representations of securities. If you trade a stock, and we tokenize it post-trade via the DTC, there will be no changes in how the market operates, how trades are executed, how best execution is obtained, or how buying and selling occurs on the trading platform.
Importantly, traditional and tokenized types of stocks will have the same value, the same rights and benefits, and the same market identification number.
At Nasdaq, we believe that the tokenization of securities can be built within the existing framework and guidelines of the market, and it should be. This is why the proposal is an important way to introduce tokenization to the market: it will allow this new technology to evolve and be accepted while ensuring that the investor protection measures we have built over decades remain intact.
Why is Nasdaq interested in tokenized securities?
Chuck Mack: In some ways, this is a response to demand: many participants in the market, including Nasdaq, believe that tokenization has the potential to benefit investors, issuers, and the broader economy.
Blockchain technology can offer many potential efficiencies, including faster settlement, improved audit trails, and a more streamlined process from order to trade to settlement. Additionally, once equity assets are on-chain, they can potentially be used in new ways.
All this potential means that there is excitement around this technology, and we are hearing demand in the market for trading tokenized securities. We want to be part of the solution to help the market evolve to continue meeting investor needs and ensure proper implementation.
Past market failures have taught us that governance, resilience, and investor protection must be embedded from the start.
Nasdaq is committed to being a trusted structure in the global financial system, which means embracing new technologies in a way that prioritizes investors while adapting to market changes, thereby facilitating capital formation. Ultimately, it comes down to choice. If investors and market participants express a demand for a specific approach, and we can implement it in a way that maintains market integrity, then we want to give them that choice.
Why did Nasdaq propose this specific model to introduce tokenized securities trading to the market?
Chuck Mack: We want to make the process of trading tokenized securities straightforward and transparent for investors while also leveraging the benefits of the current resilient and trusted stock trading ecosystem. The proposed rule change aims to enable innovation within the current market infrastructure and structure, bringing new capabilities to investors while reinforcing the standards that make the U.S. market operate, particularly:
- Scale and Complexity: The U.S. stock market is the most in-depth and liquid market in the world, processing billions of trades daily. Any new system must operate at this scale, with resilience, redundancy, and fail-safe measures.
- Investor Protection: The U.S. stock market has safeguards and oversight measures in place to maintain accountability and responsibility for the companies involved throughout the trading lifecycle, ensuring shareholder rights, dividends, and proxy voting.
Our proposal also explicitly seeks to maintain tokenized securities trading under the umbrella of the existing system to ensure price discovery, disclosure, and best execution. The goal is to ensure that these principles remain intact as the market evolves and modernizes.
Another motivation for evolving the current system is that we want to prevent market fragmentation, avoiding situations where different versions of the same asset offer tokenized securities trading across multiple blockchains but cannot work well together—especially in cases where rules are not equally applicable. If this happens, transparency may decrease, liquidity may become fragmented, and price dislocation is likely to occur.
Capital formation with investor protection is crucial for having a well-functioning market, which is vital for keeping the economy running—at Nasdaq, we always say it comes down to liquidity, transparency, and integrity. We want to ensure that these pillars are protected as the market evolves, which is what we aim to achieve through our application.
Nasdaq recently announced changes to its listing standards, followed by news reports about the governance of crypto asset treasury companies. How does this relate to today’s announcement?
Chuck Mack: Each of these issues is independent of one another. First, we recently announced further enhancements to Nasdaq's listing standards to address critical liquidity and trading issues for companies in today's market environment. These enhancements primarily target certain micro-cap companies that exhibit lower liquidity conditions.
Second, we have noted recent media reports regarding crypto asset treasury companies. Nasdaq has not implemented any changes or new rules for these companies. As with any market development, Nasdaq consistently provides guidance to our listed companies regarding the applicability of our existing listing rules, including shareholder approval rules applicable to any securities issuance by listed companies.
Third, today’s announcement represents a separate application submitted to the U.S. Securities and Exchange Commission to facilitate the trading of tokenized securities on its market.
While each of these issues is independent, there is a common thread guiding Nasdaq's actions in the capital markets, which is to optimize capital formation while protecting investors and ensuring market integrity.
So, what are the next steps for tokenized securities?
Chuck Mack: The application we submitted to the SEC will be published for comment, and we look forward to hearing different perspectives in response. In fact, part of the reason we submitted the application is to stimulate debate in a very transparent manner.
Meanwhile, our team at Nasdaq will work closely with clients and stakeholders to explain our ideas and gather feedback on how best to move the industry forward.
Globally, it is clear that the adoption of tokenization will be a broad dialogue that requires coordination across the entire industry. Market infrastructure providers, regulators, issuers, asset management firms, and fintech companies will all play a role.
We welcome these discussions because it ultimately relates to Nasdaq's core mission: driving economic progress for all.
Economies thrive on innovation and participation, and these forces require market structures that reduce friction and align incentives. Our tokenization proposal represents a step forward in the evolution of global financial markets.
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