The SEC’s new approval of Nasdaq’s Tokenized Securities Framework marks a key turning point for how stocks will be traded in the future: It brings blockchain to the heart of the U.S. stock market, but on Wall Street terms.
The regulatory green light allows Nasdaq to test a system in which certain stocks and ETFs could be issued and settled as blockchain-based tokens while trading alongside traditional stocks. In effect, investors can hold tokenized versions of securities in digital wallets and have them cleared and settled by the Depository Trust & Clearing Corporation (DTCC).
However, this effort is not an overhaul of how markets work; Instead, it focuses on the post-trade pipeline.
DTCC executive Brian Steele said the company aims to build “safe and secure tokenized services to advance a more resilient, inclusive, cost-effective and efficient financial system” while working with exchanges and market participants to expand adoption.
Read more: Here’s why Nasdaq and NYSE owners are putting the $126 trillion stock market on the blockchain
“The biggest beneficiary”
One of the main reasons why Wall Street giants are turning to stock tokenization is that they can provide traders with round-the-clock trading.
Traditional stock markets operate within fixed trading hours and rely on multi-day settlement cycles. Creating equity tokens on blockchain rails brings the possibility of near-instantaneous settlement and eventually round-the-clock trading.
Val Gui, general manager of Kraken’s tokenized stock platform xStocks, called the approval “a clear signal that the $126 trillion stock market will shift to the blockchain track,” noting that stock ownership will become “24/7 and global” in the future.
“This is the basis for the SEC’s partnership with DTC, which is an encouraging collaboration,” said Ian De Bode, president of tokenization company Ondo. “Even in a permissioned format, progress in the 24/7 market is positive.”
“The biggest beneficiaries will be global investors … who have long lacked seamless, around-the-clock access to U.S. equity investments,” he added.
To that end, Nasdaq said it is using cryptocurrency exchange Kraken to distribute stock tokens globally.
Wall Street maintains control
Still, Nasdaq’s model doesn’t replace the old financial system. It only extends this to on-chain securities.
Tokenized shares will still be traded through brokers and settled through DTCC, with the blockchain primarily used as a proxy record of ownership.
“Nasdaq is effectively limiting the benefits of blockchain to existing TradFi [traditional finance] stack,” said Maylea Ma, deputy general counsel at decentralized exchange (DEX) aggregator 1inch.
Investors might see faster settlements or more flexible ownership features, but only within a permissioned system that still relies on intermediaries, she said.
“If tokenized stocks cannot be connected to broader on-chain liquidity and non-custodial execution, then efficiency improvements will be incremental rather than transformative,” Ma said.
“Still one step behind”
While the move is a step toward future deals, the U.S. still lags behind other jurisdictions.
Jesse Knutson, head of securities operations at Bitfinex who has worked on tokenized offerings in frontier markets such as Kazakhstan and El Salvador, said the approval reflected regulatory progress but also highlighted how far U.S. efforts still have to go.
“The flexibility of tokenization is what the market really wants,” offering 24/7 trading, fragmentation, real-time settlement and self-custody capabilities, he said.
In places like Kazakhstan’s Astana International Financial Center (AIFC) and El Salvador, regulators have allowed the issuance and trading of tokenized securities with reduced legacy restrictions, including more direct investor access and blockchain-native settlement. Other centers such as Switzerland and the United Arab Emirates have also accelerated the pace of establishing frameworks for the issuance and trading of digital assets, giving companies space to experiment.
“This is an encouraging move … but it still lags behind more progressive jurisdictions,” Knudson said.
To be fair, U.S. regulators oversee the world’s largest and most dominant stock market (worth approximately $62 trillion), which leaves less incentive and flexibility to reform existing systems in favor of new blockchain-based models. Any changes must be consistent with entrenched market structures built around investor protection, intermediaries and centralized clearing.
But for now, the SEC’s decision signals a clear direction: Tokenization is about to hit the public markets, and, at least initially, it will be shaped by the same institutions and rules that define them today.
