On September 8, 2025, Nasdaq announced that it had submitted a filing to the U.S. SEC to facilitate the trading of tokenized securities on the Nasdaq Stock Market.

This marks a national-level U.S. exchange directly engaging in the tokenization of U.S. stocks. Below, 10 questions are used to interpret Nasdaq’s latest proposal on stock tokenization.

1. What is Nasdaq planning to do?
   On September 8, Nasdaq submitted a proposed rule change to the U.S. Securities and Exchange Commission (SEC) aimed at allowing its member firms and investors to tokenize equity securities and exchange-traded products (ETPs) traded on the Nasdaq Stock Market. This move is intended to promote financial innovation while maintaining market stability, fairness, and investor protection. Specifically, the filing provides a clear and concise framework to ensure that tokenized securities can be traded under the existing U.S. stock market rules. This proposed rule is forward-looking and serves as a framework for open and transparent communication with the U.S. SEC and other industry stakeholders.

2. Why conduct tokenized securities trading under the existing framework?
   The current market rules are designed to ensure market liquidity, help maintain the competitiveness, transparency, and fairness of the U.S. stock market, and thereby promote economic growth. Nasdaq’s proposed solution aims to maintain cross-market connectivity and competitiveness while ensuring that investor protection and capital formation mechanisms remain unaffected. Integrating tokenized securities into this mature framework will not only bring tangible benefits but also continue to advance the leading global position of the U.S. stock market.

3. What changes are needed to the current system?
   The current market system can accommodate tokenized securities trading without significant changes or restructuring. Traditional stocks and tokenized stocks share the same CUSIP (Committee on Uniform Security Identification Procedures) number, and shareholders enjoy identical substantive rights and benefits. Both forms of stocks will trade on the same Nasdaq order book with the same execution priority. Essentially, there is no difference between them during the trading phase of the transaction lifecycle. If trading participants opt for tokenized settlement, the stocks will be converted into tokenized form during the settlement phase.

4. When is tokenized securities trading expected to launch?
   Tokenized securities trading will only commence after the U.S. SEC approves the proposal. Implementation will require collaboration with industry stakeholders to ensure market stability, fairness, and investor protection within a reasonable timeframe. The specific launch date will depend on the progress of these processes.

5. Will tokenized securities support 24-hour trading?
   To ensure the core principles of market fairness, integrity, and resilience remain unwavering, the trading hours for tokenized securities will align with those of traditional securities, following Nasdaq Stock Market’s decisions regarding 24-hour trading.

6. What advantages does tokenization offer compared to the current securities trading model?
   Nasdaq’s proposal will enable listed securities to be tokenized and traded under the world’s leading, most trusted, and liquid market rules and protection mechanisms. This approach will provide a clear path for the development of tokenized securities, avoiding further fragmentation of market liquidity. Additionally, it will create a platform for future innovations—such as faster and more efficient settlement, flexible collateral movement, and expanded market access channels.

7. Can issuers opt out if they do not wish to be tokenized?
   The proposal is subject to public feedback and review by the U.S. SEC, and the final rules will depend on the SEC’s decisions. Nasdaq believes that any regulatory response should prioritize issuer feedback to ensure uniform and consistent implementation standards across the U.S. stock market.

8. How will Nasdaq ensure tokenized securities have the same rights and protections as traditional stocks?
   Tokenized securities traded on Nasdaq, as equivalent forms of traditional securities, will be subject to the same market rules, protections, and regulatory oversight as traditional securities. Shareholder voting rights, ownership, and investor protection rights will remain entirely unaffected.

9. Who will tokenize the securities?
   The filing outlines a straightforward operational plan: clients can choose to clear and settle transactions in tokenized form through the Depository Trust Company (DTC), thereby tokenizing their held trading securities.

10. How will market data for tokenized securities be disseminated?
    Under current market rules, tokenized securities traded on Nasdaq will use the same pricing and pre-trade data infrastructure as traditional securities. There will be no separate data feeds or pricing mechanisms for tokenized securities. All pricing information will continue to be disseminated through Nasdaq’s existing proprietary data feed systems, ensuring market transparency remains unaffected. The public blockchain provides a traceable and auditable record of all transactions involving security tokens. Issuers and investors can trace the ownership history of securities by querying smart contract addresses and related transaction records.