A revolution of blockchain integration led by traditional financial giants is unfolding with great momentum.
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 that exchange. This means that stocks of leading companies like Apple and Microsoft will be able to be traded and settled in tokenized form 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 at Nasdaq, detailing how this proposal works, why it is being launched, and how it may change the way everyone invests.
Simply put, what does Nasdaq hope to achieve with this application submitted to the SEC?
Chuck Mack: The proposed rule changes by Nasdaq would allow 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 and straightforward method for conducting tokenized securities trading within the existing regulatory framework and utilizes the Depository Trust Company (DTC) for trading clearance and settlement in tokenized 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, using distributed ledger or blockchain technology.
When submitting an order, participants can choose to clear and settle in either traditional or tokenized form, and the exchange will relay participants' instructions to DTC. All stocks will be traded on Nasdaq following the same order input and execution rules, with the same identification number (CUSIP) as traditional stocks, granting their holders the same rights and benefits.
So, what exactly are tokenized securities?
Chuck Mack: There are two components here: tokens and securities.
In this context, tokens are digital representations of any asset created and recorded on a blockchain – this data storage method was initially promoted by Bitcoin. This can include coins like Bitcoin itself, as well as tokens pegged to the U.S. dollar, such as the stablecoin Tether (USDT), or represent ownership based on blockchain or any other form of rights.
Meanwhile, securities are tradable financial assets that represent ownership or debt in a company – such as stocks or bonds.
Thus, tokenized securities represent 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, they still represent the same value storage as their traditional counterparts according to our proposal.
After all, we live in a digital world. Today's stocks and other securities are represented and recorded digitally, so tokenization is merely a different way of representing assets digitally.
What key details should ordinary investors be aware of in the Nasdaq proposal?
Chuck Mack: Fundamentally, we propose to leverage the existing infrastructure of the U.S. market to enable tokenized securities trading.
There is significant global demand for securities traded on Nasdaq, and this tokenization technology has generated 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 tokenized digital representations of securities.
The proposed rule changes will give investors a choice: to choose whether they want to trade stocks or ETPs represented as tokenized or traditional digital forms. If they choose the tokenized approach, then DTC will work in the background to clear and settle the trade, recording the asset as a blockchain-based token.
It is worth noting that this trading will still occur under existing federal regulations of the SEC to ensure 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 after the transaction by DTC, there is no change in how the market operates, how the trading is done, how best execution is obtained, or how it is bought and sold on trading platforms.
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 not only be built within the existing framework and guidelines of the market but should be. That is why this proposal is an important way to introduce tokenization into the market: it will allow this new technology to evolve and be accepted while also ensuring that the investor protections we have built over decades remain intact.
Why is Nasdaq interested in tokenized securities?
Chuck Mack: In some respects, this is in response to demand: many participants in the market, including Nasdaq, believe tokenization has the potential to benefit investors, issuers, and the economy more broadly.
Blockchain technology can provide many potential efficiencies, including faster settlements, 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 about this technology, and we hear that there is demand in the market for trading tokenized securities. We hope to be part of the solution to help the market evolve to continue meeting investor needs and ensure proper implementation.
Past market failures tell us that governance, resilience, and investor protection must be embedded from the outset.
Nasdaq is committed to being a trusted structure in the global financial system, which means embracing new technologies in a way that prioritizes investors as market dynamics change, thereby promoting capital formation. Ultimately, it comes down to choice. If investors and market participants express a demand for a particular approach, and we can implement it while maintaining market integrity, then we want to give them this choice.
Why did Nasdaq propose this specific model to introduce tokenized securities trading into the market?
Chuck Mack: We want to make the process of trading tokenized securities simple and transparent for investors while also leveraging the benefits of the current resilient and trusted stock trading ecosystem. The proposed rule changes aim to enable innovation within the existing 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 deeply liquid market in the world, processing billions of transactions daily. Any new system must operate at this scale, with resilience, redundancy, and fail-safes.
- Investor protection: The U.S. stock market has safeguards and oversight measures in place to uphold the accountability and responsibility of companies involved in 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 unchanged throughout the evolution and modernization of the market.
Another motivation for evolving the current system is that we want to prevent market fragmentation and avoid different versions of the same asset being offered for tokenized securities trading across multiple blockchains without good interoperability – especially in cases where rules are not equally applied. If this occurs, transparency may decline, liquidity may disperse, and price dislocation may likely happen.
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 throughout the evolution of the market, which is what our application aims to achieve.
Nasdaq recently announced changes to its listing standards, and there have since been news reports about the governance of cryptocurrency asset treasury companies. What does this have to do with today's announcement?
Chuck Mack: Each of these questions is independent. First, we recently announced further enhancements to Nasdaq's listing standards to address key liquidity and trading issues for companies in today's market environment. These enhancements primarily target certain micro-cap companies that exhibit low liquidity conditions.
Secondly, we noted recent media reports regarding cryptocurrency asset treasury companies. Nasdaq has not implemented any changes or new rules regarding these companies. As with any market development, Nasdaq has consistently provided guidance to our listed companies on 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 in its market.
While each of these questions is independent, there is a common thread guiding Nasdaq's actions in the capital markets, which is optimizing capital formation while protecting investors and ensuring market integrity.
So, what is the next step for tokenized securities?
Chuck Mack: The application we submitted to the SEC will be made public for comments, 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 drive the industry forward.
Globally, it is clear that the adoption of tokenization will be a broad conversation that requires coordination across the entire industry. Market infrastructure providers, regulators, issuers, asset managers, and fintech companies will all play a role.
We welcome these discussions because they ultimately relate to Nasdaq's core goal: driving economic progress for everyone.
The economy thrives on innovation and participation; these forces require a market structure that reduces friction and aligns incentives. Our tokenization proposal represents a step forward in the evolution of global financial markets.
Author: Bootly.eth
