- Nasdaq’s filing with the SEC seeks approval to allow tokenized stocks to trade alongside traditional securities.
- Tokenized stocks would benefit from blockchain technology, offering faster settlements and improved transparency.
- The SEC has clarified that tokenized stocks will be treated as securities, ensuring the same regulations as traditional stocks.
Nasdaq has taken a significant step in its journey toward digital asset integration by filing with the U.S. Securities and Exchange Commission (SEC) to list tokenized stocks on its platform. The filing, which includes a proposed rule change, seeks to amend Nasdaq’s operating rules to allow the trading of securities in tokenized forms utilizing blockchain technology. The exchange intends for these tokenized stocks to be traded similarly to traditional stocks, maintaining shareholder rights and clearing processes while also benefiting from the speed and efficiency of blockchain.
Proposal Aims to Blend Traditional and Tokenized Markets
Nasdaq’s proposed rule change outlines how these tokenized stocks would function. If approved, the tokenized versions of stocks would trade side by side with their traditional counterparts, but with added blockchain technology benefits. One key feature of this proposal is labeling tokenized stocks to ensure transparency. This tagging would assist investors in differentiating between the traditional and tokenized stocks in settling trades. Further, Nasdaq will make tokenized stocks have the same order priority as standard stocks so that they can be smoothly integrated into the existing systems of the exchange.
Galaxy Digital Is on the Vanguard of Tokenized Stock Trading.
The action by Nasdaq follows only days after Galaxy Digital, the first firm to list on the exchange to tokenize its common stock. The change is significant in the financial sector, where organizations are progressively considering the benefits of blockchain technology, such as a faster settlement period and better audit trails. The filing of Nasdaq is an indication of this expanded need to tokenize and indicates an interest of the platform in keeping abreast of technology.
Penny cryptocurrencies The SEC has already affirmed that tokenized stocks, such as their conventional counterparts, will remain securities. This clarification will provide that the tokenized stocks will remain subject to the same rules as the traditional securities in order to protect investors and leave the market stable. Besides, according to the SEC project Crypto, the initiative is expected to introduce more digital assets into the American market, and the filing by Nasdaq conforms to the ambition of the commission to boost more blockchains.
Digitization of Traditional Markets.
Chuck Mack, Senior Vice President of North American Markets at Nasdaq, emphasized that the purpose of the proposal is to fit digital assets into the current infrastructure of the exchange without any issues. The action is aimed at encouraging financial innovation, but it keeps an atmosphere of stability and investor protection that the market is characterized by. Nasdaq is optimistic that tokenized stocks will offer various efficiencies, such as expedited settlement, as well as simplified transactions between order placement and settlement.
