Today the Nasdaq announced that it has lodged a rule change request with the Securities and Exchange Commission (SEC) to support the trading of tokenized stocks on the exchange.
The goal is for tokenized stocks and the conventional version to be traded under the same rules and order execution, have the same identification number (CUSIP) and carry the same rights. While the Depository Trust Company (DTC) would still look after post trade, there would be the option of settlement either as a conventional security or in the tokenized form.
A key aim is to avoid fragmentation, where you might have different versions of a stock that’s on Ethereum versus Solana or another blockchain. Instead you trade “the stock” and then the recording of the stock trade is either on a conventional ledger or a blockchain.
Last week Galaxy Digital showed how this is done, with Superstate acting as the transfer agent for tokenized securities. The book of record was simply transferred from a conventional ledger to the blockchain. This is the elegant way to do it and the methodology that provides the maximum investor protection.
“Today’s filing marks an early step in Nasdaq’s journey to bring digital assets technology into the U.S. equities markets and to take a responsible approach to bridge the gap between the digital-asset and traditional-asset worlds,” said Tal Cohen, President of Nasdaq. “Our proposal aims to provide meaningful benefits to markets by integrating new capabilities into the fabric of our financial system and further advancing the world’s most efficient and trusted markets.”
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