On September 8, the Nasdaq Stock Market LLC filed a proposed rule with the US Securities and Exchange Commission (SEC) that could transform how stock trades are settled in the US.1
The proposed rule would enable the settlement of tokenized equity securities and exchange-traded products using blockchain technology. Specifically, it would allow investors to choose whether to settle trades in the traditional digital form or a tokenized blockchain form on a trade-by-trade basis, with the first token-settled trades potentially occurring by the end of the third quarter of 2026.
Nasdaq's proposal arrives as distributed ledger technology and blockchain have moved from experimental projects into mainstream financial services. Major banks and asset managers have launched tokenized product offerings, and market participants increasingly view blockchain-based settlement as a realistic component of future capital markets infrastructure.
Yet tokenization remains a term laden with both promise and speculation. Proponents envision dramatic improvements in market efficiency, settlement speed and market access, but what tokenization can deliver within the existing regulatory frameworks is more modest than popular enthusiasm suggests.
Importantly, Nasdaq's proposal operates within the existing framework of the US securities laws, including the Securities Exchange Act, as amended; the SEC's Regulation National Market System; and a complex web of rules governing broker-dealers, clearing agencies and transfer agents that have been refined over decades.
The proposal seeks to apply existing rules to blockchain-based settlement of equity securities rather than asking regulators to create new exemptions or adopt novel rules. This approach contrasts with some tokenization initiatives that seek to operate outside traditional regulatory structures or establish alternative market infrastructure.
“Evaluating Nasdaq Tokenization Rule's Potential Impact,” Law360, November 19, 2025
1 SR-NASDAQ-2025-072 available at https://listingcenter.nasdaq.com/assets/rulebook/nasdaq/filings/SR-NASDAQ-2025-072.pdf; SEC Release No. 34-103989 available at https://www.sec.gov/files/rules/sro/nasdaq/2025/34-103989.pdf.
Chicago
