The SEC approved a rule change for Nasdaq to allow trading of tokenized securities.

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In a landmark decision, the U.S. Securities and Exchange Commission (SEC) approved a rule change proposal filed by Nasdaq, allowing the listing and trading of tokenized securities on its trading infrastructure. This approval, detailed in SEC Notice No. 34 (dated March 18, 2026), paves the way for Nasdaq to operate a regulated market for blockchain-based security tokens — including tokenized stocks, debt instruments, funds, and real assets (RWAs) — under current U.S. securities law.

Tokenized securities representing ownership in traditional financial instruments (stocks, bonds, private credit, real estate, funds) will be eligible for listing, provided they meet all current Nasdaq listing standards plus additional blockchain-specific requirements.

• New listing criteria: Tokens must be issued and maintained on a public or restricted-access blockchain with robust smart contract auditing standards.

• Full compliance with SEC registration requirements (Forms S-1, S-3, or Regulation A/D) or exemption (Regulation D, Regulation S).

• Daily inventory verification and third-party custody verification.

• Real-time on-chain payment capability with T+1 or better validation.

• Clearly disclose blockchain risks (forking, smart contract vulnerabilities, wallet security) to investors.

Traditional stock markets rely on multi-layered post-transaction processes involving clearinghouses, custodians, and settlement systems, which can take days to complete a transaction. Tokenization shortens this process to real-time or near-instantaneous settlement, reducing counterparty risk and operational friction.

Implications for Wall Street and institutional investors

For institutional investors, tokenized securities offer the potential for faster settlements and improved liquidity, programmable compliance and automation, partial ownership of less liquid traditional assets, and more efficient collateral management.

The SEC's approval reduces a major barrier to adoption: regulatory uncertainty. With the involvement of a regulated exchange like Nasdaq, institutions can participate in tokenized assets without stepping outside their familiar regulatory framework.

The convergence of traditional finance and blockchain

This development is part of a broader trend where traditional finance (TradFi) and blockchain infrastructure are converging. Instead of replacing existing systems, cryptography is increasingly being built on top of them.

Nasdaq's move suggests that the future of the market may not be "cryptocurrency versus traditional finance," but rather traditional finance rebuilt on a blockchain platform.

This convergence has been evident in areas such as encrypted treasuries, on-chain funds, and blockchain-based payment networks.

Our review

Nasdaq's rule change, approved by the SEC to allow trading of tokenized securities, can be considered the most significant legal development in the United States for risk-weighted assets (RWA) since the approval of spot ETFs. It transforms tokenized assets from private placements and offshore trials into publicly tradable securities on a major exchange—unlocking institutional investment capital, secondary liquidity, and mainstream legitimacy. For the crypto economy, this marks the moment the bridge from TradFi to blockchain-based finance officially opens. The milestone of over $1 billion worth of tokenized commodities traded on XRPL is just the beginning.

Disclaimer: The information presented in this article is the author's personal opinion in the field of cryptocurrency. This is not financial or investment advice. All investment decisions should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in this article do not represent the official position of the platform. We advise readers to conduct their own research and consult with experts before making any investment decisions.

Compiled and analyzed by HCC Venture

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