If You Can't Beat Them, Join Them? Nasdaq Executive Explains Why They Proactively "Embrace" Tokenization

Original Title: Q&A: Nasdaq's New Proposal for Tokenized Securities

Original Source: Nasdaq Newsroom

Original Translation: BitpushNews

A blockchain integration revolution led by traditional financial giants is spreading rapidly.

On September 8, 2025, Nasdaq submitted a milestone proposal to the U.S. Securities and Exchange Commission (SEC), seeking approval for its members and investors to trade tokenized equity securities and exchange-traded products (ETPs) on the exchange. This means that in the future, stocks of leading companies such as Apple and Microsoft could be traded and settled on Nasdaq in the form of blockchain tokens.

“We are not trying to replace the existing system, but to provide the market with a more efficient and transparent technological alternative.” Chuck Mack, Senior Vice President of Nasdaq North American Markets, said in an exclusive interview, “Tokenized securities are simply the same assets expressed in a new form on the blockchain.”

The following is the full interview with Chuck Mack and Nasdaq, providing a detailed interpretation of how this proposal works, why it was launched, and how it may change the way everyone invests.

Simply put, what does Nasdaq hope to achieve with this application to the SEC?

Chuck Mack: The rule change proposed by Nasdaq will enable member firms and investors to trade tokenized versions of equity securities and exchange-traded products (ETPs) on our market. Our goal is to integrate digital assets into Nasdaq’s current infrastructure and systems, thereby driving financial innovation while maintaining stability, fairness, and investor protection.

Specifically, this application provides a straightforward method that allows tokenized securities trading under the existing regulatory framework, utilizing the Depository Trust Company (DTC) for trade clearing and settlement in tokenized form.

Here’s how it works: a security can be traded on Nasdaq in either traditional or tokenized form.

- The traditional form is a digital representation of ownership and rights, but does not use distributed ledger or blockchain technology.

- The tokenized form is a digital representation of ownership and rights, using distributed ledger or blockchain technology.

When submitting an order, participants can choose to clear and settle in the conventional or tokenized form, and the exchange will communicate the participant’s instructions to DTC. All stocks will be traded on Nasdaq under the same order entry and execution rules, have the same identification number (CUSIP) as traditional stocks, and grant holders the same rights and benefits.

To backtrack a bit, what exactly are tokenized securities?

Chuck Mack: There are two components here: tokens and securities.

In this context, a token is a digital representation of any asset created and recorded on a blockchain—a method of data storage first popularized by bitcoin. This could include coins like bitcoin itself, tokens pegged to the US dollar such as the stablecoin Tether (USDT), or representations of ownership or any other form of rights based on blockchain.

Meanwhile, a security is a tradable financial asset representing ownership or debt in a company—such as stocks or bonds.

Therefore, tokenized securities are representations of these traditional financial instruments, recorded on a blockchain or other distributed ledger technology.

From our perspective, it’s important to emphasize that while tokenized securities are technically different from those traded on Nasdaq today, under our proposal, they still represent the same value storage as their traditional counterparts.

After all, we already live in a digital world. Today’s stocks and other securities are represented and recorded digitally, so tokenization is simply a different way of digitally representing assets.

What key details in the Nasdaq proposal should ordinary investors know?

Chuck Mack: Fundamentally, we are proposing to leverage the existing infrastructure of the US market to enable tokenized securities trading.

There is significant global demand for securities traded on Nasdaq, and this tokenization technology has sparked emerging interest. What we propose is integration capability, allowing market participants to use systems they are already familiar with and trust to obtain tokenized digital representations of securities.

The proposed rule change will give investors a choice: to select whether they want to trade a stock or ETP in tokenized form or in the traditional digital form. If they choose the tokenized approach, DTC will do the backend work to clear and settle the trade, recording the asset as a blockchain-based token.

It’s important to note that such trading will still take place under the SEC’s existing federal regulations, ensuring fair and orderly trading.

This is a key point in our application: existing US rules do not exclude different types of representations for securities. If you trade a stock and we have DTC tokenize it after the trade, there is no change in how the market operates, how trades are executed, how best execution is achieved, or how you buy and sell on the trading platform.

Importantly, both traditional and tokenized types of stocks will have the same value, the same rights and benefits, and the same market identification number.

At Nasdaq, we believe that securities tokenization can and should be built within the existing framework and guidelines of the market. That’s why this proposal is an important way to introduce tokenization to the market: it will allow this new technology to evolve and be adopted, while also ensuring that the investor protection measures we’ve built over decades remain intact.

Why is Nasdaq interested in tokenized securities?

Chuck Mack: In some ways, this is in response to demand: many participants in the market, including Nasdaq, believe tokenization has the potential to benefit investors, issuers, and the economy more broadly.

Blockchain technology can offer many potential efficiencies, including faster settlement, improved audit trails, and a more streamlined process from order to trade to settlement. In addition, once equity assets are on-chain, they have the potential to be used in new ways.

All this potential means people are excited about the technology, and we hear there is demand in the market for trading tokenized securities. We want to be part of the solution, helping the market evolve to continue meeting investor needs and ensuring proper implementation.

Past market failures have taught us that governance, resilience, and investor protection must be embedded from the start.

Nasdaq is committed to being the trusted structure of the global financial system, and doing so means embracing new technologies as the market changes and in an investor-first way, thereby facilitating capital formation. Ultimately, it comes down to choice. If investors and market participants express demand for a particular approach, and we can implement it in a way that maintains market integrity, then we want to give them that choice.

Why does Nasdaq propose this specific model to introduce tokenized securities trading to the market?

Chuck Mack: We want to make the process of trading tokenized securities simple, clear, and transparent for investors, while also leveraging the benefits of the current resilient and trusted stock trading ecosystem. The proposed rule change is designed to enable innovation within the current market infrastructure and structure, bringing new capabilities to investors while reinforcing the standards that make the US market work, especially:

- Scale and complexity: The US stock market is the world’s deepest and most liquid, processing tens of billions of trades daily. Any new system must operate at this scale, with resilience, redundancy, and fail-safes.

- Investor protection: The US stock market has safeguards and oversight to maintain the responsibility and accountability of companies involved in the trading lifecycle, ensuring shareholder rights, dividends, and proxy voting.

Our proposal also explicitly seeks to keep tokenized securities trading under the umbrella of the existing system to ensure price discovery, disclosure, and best execution. The goal is to ensure these principles remain unchanged as the market evolves and modernizes.

Another motivation for evolving the current system is that we want to prevent market fragmentation and avoid different versions of the same asset being traded as tokenized securities across multiple blockchains that cannot interoperate well—especially where rules are applied unequally. If this happens, transparency may decrease, liquidity may fragment, and price decoupling is likely.

Capital formation with investor protection is essential for a well-functioning market, which is vital for keeping the economy running—at Nasdaq, we always say it comes down to liquidity, transparency, and integrity. We want to ensure these pillars are protected as the market evolves, and that’s what our application aims to achieve.

Nasdaq recently announced changes to its listing standards, followed by news reports about crypto asset treasury company governance. How does this relate to today’s announcement?

Chuck Mack: Each of these issues is independent. First, we recently announced further strengthening of Nasdaq’s listing standards to address key liquidity and trading issues for companies in today’s market environment. These enhancements are mainly aimed at certain micro-cap companies exhibiting low liquidity conditions.

Second, we have noted recent media reports about crypto asset treasury companies. Nasdaq has not implemented any changes or new rules for these companies. As with any market development, Nasdaq consistently provides our listed companies with guidance on the applicability of our existing listing rules, including shareholder approval rules for any securities issuance by listed companies.

Third, today’s announcement represents a separate application submitted to the SEC to facilitate trading of tokenized securities on its market.

While each of these issues is independent, there is a common thread guiding Nasdaq’s actions in the capital markets, which is to optimize capital formation toward our goals while protecting investors and ensuring market integrity.

So, what’s next for tokenized securities?

Chuck Mack: Our application to the SEC will be published for comment, and we look forward to hearing a variety of perspectives in response. In fact, part of the reason we submitted the application is to encourage debate in a very transparent way.

Meanwhile, our team at Nasdaq will work closely with clients and stakeholders to explain our ideas and gather feedback on how best to move the industry forward.

Globally, it’s clear that the adoption of tokenization will be a broad conversation requiring coordination across the industry. Market infrastructure providers, regulators, issuers, asset management companies, and fintech companies will all play a role.

We welcome these discussions because ultimately, this is about Nasdaq’s core goal: driving economic progress for all.

The economy thrives on innovation and participation, and these forces require market structures that reduce friction and align incentives. Our tokenization proposal represents a step forward in the evolution of global financial markets.