The U.S. Securities and Exchange Commission approved a Nasdaq rule change on March 18, 2026, allowing securities listed on the exchange to trade in tokenized form under the Depository Trust Company’s pilot program, marking a structured step toward regulated onchain equity trading.
The approval came through SEC Release No. 34-105047, which greenlit Nasdaq’s proposed rule change as modified by Amendment No. 2. Under the approved framework, tokenized securities will trade on the same order book as their traditional counterparts and retain the same execution priority.
The ruling follows a regulatory process that began when the SEC first noticed the filing (SR-NASDAQ-2025-072) in September 2025, instituted proceedings in December 2025, and reviewed a second amendment in January 2026. It also builds on a December 11, 2025 SEC staff no-action letter related to DTCC tokenization services.
What the Approval Does and Does Not Cover
Despite social media posts framing the order as a broad greenlight for tokenized stock trading, the scope is narrow. The approval is limited to DTC-eligible participants and DTC-eligible securities only, not a blanket onchain listing regime.
The initial set of eligible securities covers certain Russell 1000 stocks and major-index ETFs that qualify under the DTC pilot. Not all Nasdaq-listed equities can trade in tokenized form under this order.
If DTC cannot execute a tokenization request for any reason, the trade settles in traditional non-tokenized form at the standard T+1 cadence. This fallback mechanism ensures no disruption to existing market operations.
The distinction matters for crypto markets, where participants may be watching how Ethereum and other blockchain platforms could eventually benefit from increased institutional tokenization activity.
Tokenized Trading Will Not Start Immediately
SEC approval alone does not trigger an immediate launch. Nasdaq stated the rule becomes effective only once DTC infrastructure and post-trade settlement services are fully established.
The exchange must also provide at least 30 days’ notice to its members before tokenized trading begins. No specific go-live date has been announced.
Nasdaq Executive Vice President Tal Cohen said in a March 9 press release that “public companies should always remain at the center of the equity market ecosystem,” signaling the exchange’s intent to keep issuers central to any tokenization framework rather than ceding ground to decentralized alternatives.
Arjun Sethi, commenting on Nasdaq’s equity token design, noted that “tokenization improves market infrastructure at the asset layer,” pointing to efficiency gains in settlement and custody rather than a fundamental change in how securities are regulated.
Regulatory Context and What Comes Next
The approval sits within a broader regulatory trajectory. SEC Commissioner Hester Peirce stated in July 2025 that tokenized securities remain securities under federal law, and in December 2025 described the DTC pilot as an incremental step in moving markets onchain.
For market participants tracking the intersection of traditional finance and digital assets, the order arrives during a period of relative macroeconomic stability following the Federal Reserve’s recent rate decisions. How tokenized equities interact with broader market conditions, including the Fed’s forward guidance, will depend on rollout timing and institutional adoption within the DTC pilot.
The next concrete milestone is DTC completing the infrastructure buildout and Nasdaq filing its 30-day advance notice to members. Until then, all Nasdaq securities continue to trade exclusively in their traditional form.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.
