Nasdaq Pioneers Tokenized Securities on Wall Street

Nasdaq seeks U.S. regulatory approval to trade tokenized securities, marking a significant bid to introduce blockchain-based settlement into the stock exchange market. This move could revolutionize financial transactions, offering greater liquidity and efficiency, but concerns about regulation and systemic risks persist.

Nasdaq is applying for approval from U.S. regulators to trade tokenized securities, in a groundbreaking move that could transform Wall Street transactions. If successful, it would be the first time tokenized securities are permitted on a major U.S. stock exchange, showcasing Wall Street's growing interest in blockchain technology.

The proposal filed with the U.S. Securities and Exchange Commission includes adjustments to current regulations, potentially enabling the trading of stocks and exchange-traded products in both traditional and tokenized forms. Nasdaq's initiative aligns with a broader trend in the financial industry, where global investor demand for tokenized assets is increasing.

Despite the potential benefits, such as improved liquidity and efficiency, the initiative faces challenges, including regulatory hurdles and fears of new systemic risks. Critics argue that tokenization must adhere to existing securities laws to prevent market instability, as stakeholders like the World Economic Forum and World Federation of Exchanges voice concerns about the rapid tokenization trend.

(With inputs from agencies.)