Nasdaq Pushes for SEC Approval on Tokenized Stocks: A New Era for Digital Assets
Introduction: Nasdaq’s Landmark Proposal for Tokenized Equities
The traditional financial world is poised for a seismic shift as Nasdaq, a global leader in stock exchange technology, formally seeks regulatory approval to integrate blockchain-based assets into its core operations. In a recent interview with CNBC, Matt Savarese, Nasdaq’s Head of Digital Assets Strategy, confirmed that securing U.S. Securities and Exchange Commission (SEC) approval for its proposal to offer tokenized stocks is a top priority. The proposal, submitted on September 8, requests permission to allow investors to buy and sell digital representations of shares in publicly traded companies directly on the exchange. Savarese’s comments underscore a pivotal moment where one of the world's most prominent financial institutions is not just dabbling in digital assets but actively working to bring them under a regulated, mainstream umbrella. This move represents the most significant institutional bridge yet between traditional equity markets and the burgeoning world of crypto, signaling a potential transformation in how stocks are owned and traded.
The Proposal: What Nasdaq is Actually Asking For
At its core, Nasdaq’s proposal is a request for regulatory permission to list and facilitate the trading of what it terms "stock tokens." These are not new cryptocurrencies but digital representations of existing shares listed on the exchange. The key distinction lies in their form and the underlying settlement mechanism. Instead of relying solely on traditional clearinghouses, these tokens would leverage blockchain technology to represent ownership.
During his CNBC interview on Thursday, Savarese was careful to frame this initiative as an evolution, not a revolution. “We’re not looking at upending the system; we want everyone to come along for that ride and bring tokenization more into the mainstream,” he stated. He further emphasized the commitment to operating within established frameworks, adding, “We want to do it in that responsible investor-led way first, under the SEC rules themselves.” This language is strategically aimed at reassuring regulators and traditional market participants that Nasdaq’s goal is integration and efficiency, not the displacement of the current financial structure. The proposal itself marks a formal and public step in a journey that exchanges have been exploring privately for years.
Nasdaq’s Digital Asset Strategy: A History of Innovation
To understand the significance of this move, it’s essential to view it as part of Nasdaq’s broader and longstanding strategy in the digital asset space. Savarese himself contextualized the current push by referencing the exchange’s history as a market innovator, noting that Nasdaq was the first to transition markets from paper-based trading to electronic systems.
This is not Nasdaq's first foray into blockchain. For years, the company has provided market technology software to various crypto exchanges and has been involved in projects related to the custody and settlement of digital assets. However, the September 8 proposal represents a fundamental shift from being a technology provider to the crypto industry to becoming a direct participant in tokenized assets. This transition from B2B services to a core market offering highlights Nasdaq’s conviction that tokenization is a durable and transformative trend in finance. It signals that the exchange views blockchain not as a niche experiment but as foundational technology for future markets.
The Regulatory Pathway: Engagement with the SEC
The most critical immediate hurdle for Nasdaq is navigating the SEC’s regulatory process. Savarese’s comments provide a clear window into this engagement. When asked about the timeline for potential approval this year, he responded, “We’ll just move as fast as we can.” He outlined the procedural steps ahead: “I think what we have to really evaluate [is] where the public comments come back in and then answer and respond to the SEC questions as they come through. We hope to kind of work with them as quickly as possible.”
This indicates that the proposal is now in a phase of active review and dialogue with the regulator. The SEC’s approach to crypto-related securities has been one of cautious scrutiny, emphasizing investor protection and compliance with existing securities laws. By proactively stating its readiness to answer all questions and work within the SEC’s rules, Nasdaq is positioning its proposal as a compliant and carefully constructed application designed to meet regulatory standards. The success of this dialogue will set a precedent for every other major exchange and financial institution watching from the sidelines.
Industry Precedents and Parallel Developments
While Nasdaq’s proposal is groundbreaking for a primary national exchange, it exists within a context of growing tokenization efforts. On September 3, Galaxy Digital CEO Mike Novogratz announced that his company had become the first Nasdaq-listed firm to tokenize its equity on a major blockchain, launching on the Solana network.
This event is distinct from but complementary to Nasdaq’s own proposal. Galaxy Digital’s move was a corporate action to tokenize its own stock on a public blockchain. In contrast, Nasdaq’s proposal is an infrastructure play aimed at creating a regulated marketplace for tokenizing any stock listed on its exchange. The Galaxy example demonstrates market demand and technical feasibility from the issuer side, while Nasdaq’s initiative seeks to build the primary trading venue. Together, they represent a pincer movement of institutional adoption, with companies tokenizing their equity and exchanges building the platforms to trade it.
A Divided Crypto Industry: Boon for TradFi, But What About Crypto?
The conversation around tokenized equities has revealed a strategic divide within the crypto industry itself. While many hail it as a validation of blockchain technology, others question its net benefit to the native crypto ecosystem.
The optimistic perspective sees tokenized stocks as a massive onboarding mechanism for traditional finance (TradFi) capital and users into the digital asset space. Robinhood CEO Vlad Tenev expressed this sentiment in October, stating that tokenization will “eventually eat the whole financial system.”
However, skepticism exists. On October 1, Rob Hadick, General Partner at crypto venture firm Dragonfly, told Cointelegraph that while tokenized equities will be a significant benefit to traditional markets, they may not be the boon for crypto that others predict. Hadick raised a crucial technical point: if these tokenized assets are built on layer-2 networks or specific application chains isolated from major decentralized ecosystems, it creates “leakage.” The value and activity may not flow back to foundational layers like Ethereum or other smart contract platforms “as much as hoped,” potentially creating walled gardens within the broader digital asset landscape. This debate highlights a central tension: whether institutional adoption will strengthen the open, decentralized core of crypto or lead to a new era of centralized, regulated digital silos.
Conclusion: A Strategic Inflection Point for Markets
Nasdaq’s push for SEC approval on tokenized stocks is more than just another crypto news story; it is a strategic inflection point. It represents the culmination of years of blockchain exploration by traditional finance and its most direct application yet to mainstream capital markets. The outcome of Nasdaq’s engagement with the SEC will serve as a critical bellwether, indicating whether U.S. regulators are prepared to permit the fusion of legacy equity markets with distributed ledger technology.
For readers and market participants, several key developments are worth watching closely. First, monitor the SEC’s public comment period and any subsequent statements regarding Nasdaq’s proposal. Second, observe whether other major exchanges like NYSE or CME Group announce similar initiatives, which would signal an industry-wide race. Finally, pay attention to the technological details—specifically which blockchain or layer-2 networks are ultimately chosen for these assets—as this will determine whether value accrues to existing crypto ecosystems or new, institutionally-controlled platforms.
Matt Savarese of Nasdaq stated they are not looking to upend the system but to bring everyone along for the ride. Whether this ride leads to a simple efficiency upgrade for traditional finance or a fundamental reshaping of asset ownership remains to be seen, but the journey has unequivocally begun.