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Nasdaq Proposes Tokenized Securities Trading on Major US Exchange
8 Sep
Summary
- Nasdaq files proposal to allow trading of tokenized stocks and ETFs
- Move marks first instance of tokenized securities on a major US exchange
- Comes as SEC considers rules to allow crypto trading on national exchanges
In a significant development, Nasdaq has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to allow for the trading of tokenized securities on its main market. This move, if approved, would mark the first instance of tokenized assets being traded on a major U.S. stock exchange.
The proposal comes as the SEC has unveiled plans to potentially amend its rules to enable the trading of cryptocurrencies on national securities exchanges and alternative trading systems. This reflects the growing investor demand for tokenized financial products, which proponents argue can improve liquidity in the financial system.
Nasdaq's filing indicates the exchange believes markets can utilize tokenization while "continuing to provide the benefits and protections of the national market system." The exchange has stated that "wholesale exemptions from the national market system and related protections are neither necessary to achieve the goal of accommodating tokenization, nor are they in investors' best interests."
The rise of tokenization has not been without its critics, however. Some have warned that the frenzy around tokenization could introduce new systemic risks, especially in the absence of stringent regulation. Nonetheless, Nasdaq's proposal suggests the exchange is confident it can integrate tokenized securities within the existing regulatory framework.
