Nasdaq plans to launch trading of tokenized securities

Exchanges

Tokenization refers to converting financial assets — such as stocks, bonds, or real estate — into tokens that can be traded on blockchain systems. According to Nasdaq representatives, this should increase transaction transparency, shorten settlement times, and reduce costs. If approved by regulators, investors will, for the first time, be able to trade securities with blockchain-based settlement on a major U.S. exchange.

Nasdaq insists that tokenization poses no security risks for investors. Tokenized instruments should carry the same rights and privileges as traditional securities. In that case, tokenized and traditional assets will share the same order book and follow identical execution rules. Otherwise, Nasdaq will treat tokenized assets as separate instruments with their own trading conditions.

U.S. crypto exchange Coinbase recently applied to the SEC for permission to offer tokenized stocks to its clients. Major banks such as Bank of America and Citi are exploring the launch of tokenized assets, as well as the use of stablecoins and other blockchain-based financial products. Tokenized securities have already started trading on several European platforms, but Nasdaq criticized these venues for providing access to U.S. equities without granting investors actual ownership rights.

However, the SEC remains cautious. Regulators fear that without proper oversight, tokenization could create new vulnerabilities and risks to fund safety. SEC Commissioner Hester Peirce explained that tokenized stocks must be regulated under existing securities laws.

See also: "Crypto exchange Binance adds Ethena’s USDe stablecoin to its platform"

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