In a significant step for financial infrastructure, the U.S. Securities and Exchange Commission has approved a Nasdaq pilot program to test the trading of tokenized securities. The green light, granted Wednesday, allows the exchange to list blockchain-based versions of stocks alongside their conventional counterparts.

Under the pilot, developed with the Depository Trust Company, a tokenized share will carry the same ticker, price, and shareholder rights as the original stock. The initiative aims to explore potential efficiencies, such as faster settlement times. Participation is restricted to eligible institutions, who can choose between traditional or tokenized formats for certain high-volume stocks.

The eligible securities are limited to those within the Russell 1000 Index and major ETFs tracking the S&P 500 and Nasdaq-100. The SEC noted that initial concerns over market surveillance and pricing were addressed in a revised proposal from Nasdaq.

This move signals deepening institutional interest in blockchain infrastructure for traditional markets. Nasdaq recently partnered with Kraken to facilitate tokenized securities transfers, while Intercontinental Exchange, owner of the New York Stock Exchange, invested in crypto exchange OKX for a similar purpose. The pilot reflects a broader regulatory shift; SEC Chair Paul Atkins indicated this week the agency will soon seek public comment on new exemptions for crypto-related securities offerings.

Source: CoinTelegraph