A blockchain integration revolution led by traditional financial giants is unfolding at a rapid pace.

On September 8, 2025, Nasdaq submitted a landmark 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 shares of leading companies such as Apple and Microsoft will be able to be traded and settled on Nasdaq in the form of blockchain tokens.

"We are not trying to replace the existing system, but rather provide the market with a more efficient and transparent technology option," Chuck Mack, senior vice president of Nasdaq's North American market, said in an interview. "Tokenized securities are simply the same asset expressed in a new form on the blockchain."

Below is the full interview between Chuck Mack and Nasdaq, which details how this proposal works, why it was introduced, and how it could change the way everyone invests.

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

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

Specifically, the application provides a simple and straightforward approach to allow tokenized securities to be traded under the existing regulatory framework, with the Depository Trust Company (DTC) utilizing the tokenized clearing and settlement of trades.

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

- Traditional forms are digital representations of ownership and rights, but do not use distributed ledger or blockchain technology.

- Tokenization is the digital representation of ownership and rights, using distributed ledger or blockchain technology.

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

Backtracking 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 originally popularized by Bitcoin. This could include coins like Bitcoin itself, or tokens pegged to the US dollar, such as the stablecoin Tether (USDT), or could represent ownership or any other form of rights based on a blockchain.

Meanwhile, a security is a tradable financial asset that represents ownership or claim on a company – such as a stock or bond.

Tokenized securities are therefore representations of these traditional financial instruments that have been recorded on a blockchain or other distributed ledger technology.

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

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

What are the key details in Nasdaq's proposal that ordinary investors should know?

Chuck Mack: Fundamentally, we propose to leverage the existing infrastructure of the U.S. market to enable the trading of tokenized securities.

"There is a lot of global demand for securities traded on Nasdaq, and there is emerging interest in this tokenization technology. What we propose is the ability to integrate and enable market participants to obtain tokenized digital representations of securities using a system they are already familiar with and trust."

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

It is important to note that such transactions will still be conducted under the SEC's existing federal regulations to ensure fair and orderly trading.

This is a key point in our application: existing U.S. rules do not preclude different types of representations of securities. If you trade a stock and we tokenize it after the trade by DTC, there is no change in how the market operates, how you trade, how you get best execution, or how you buy and sell on the exchange.

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

At Nasdaq, we believe that security tokenization can not only be structured within the market's existing framework and guidance, but should be. That is why this proposal is an important way to introduce tokenization to the market: it will allow this new technology to evolve and gain acceptance, while also ensuring that the investor protections we have established 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 that 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. Furthermore, once equity assets are on-chain, they have the potential to be used in new ways.

All this potential means people are excited about this technology, and we hear there's demand in the market to trade tokenized securities. We want to be part of the solution, helping the market evolve to continue meeting investor needs and ensuring it's implemented correctly.

Past market failures have taught us the importance of ensuring governance, resilience and investor protection are embedded from the outset.

Nasdaq is committed to being a trusted structure in the global financial system. Doing so means embracing new technologies as markets evolve and prioritizing investors to foster capital formation. Ultimately, it comes down to choice. If investors and market participants express a need for a particular approach, and we can implement it in a way that preserves market integrity, we want to give them that choice.

Why did 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, straightforward, and transparent for investors, while also leveraging the benefits of the current resilient and trusted equity trading ecosystem. The proposed rule changes are designed to enable innovation within the current market infrastructure and structure, bringing new capabilities to investors while strengthening the standards that make U.S. markets work, specifically:

- Scale and Complexity: The U.S. stock market is the deepest and most liquid in the world, processing billions of trades daily. Any new system must operate at this scale and have resilience, redundancy, and fail-safe measures.

- Investor Protection: U.S. stock markets have safeguards and oversight in place to maintain responsibility and accountability for companies involved in a transaction lifecycle, thereby ensuring shareholder rights, dividends, and proxy voting.

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

Another motivation for evolving the current system is to prevent market fragmentation, where different versions of the same asset are offered as tokenized securities across multiple blockchains but don’t work together well—especially if the rules don’t apply equally. If this happens, transparency could be reduced, liquidity could be fragmented, and price decoupling could become more likely.

Capital formation with investor protection is essential to having well-functioning markets, which is essential to keeping the economy functioning – 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 is what we aim to achieve through our application.

Nasdaq recently announced changes to its listing standards, and there have been subsequent news reports about corporate governance at crypto asset vaults. How does this relate to today’s announcement?

Chuck Mack: Each of these issues is independent of each other. First, we recently announced further enhancements to Nasdaq's listing standards to address key liquidity and trading issues facing companies in today's market environment. These enhancements primarily target certain micro-cap companies that exhibit lower liquidity.

Second, we note recent media reports regarding crypto-asset treasury companies. Nasdaq has not implemented any changes or new rules regarding these companies. As with any market development, Nasdaq consistently provides guidance to our listed companies regarding the applicability of our existing listing rules, including shareholder approval rules applicable to any securities offering by a listed company.

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

While each of these issues is independent, there is a common thread guiding Nasdaq's actions in the capital markets: toward our goal of optimizing capital formation while protecting investors and ensuring market integrity.

So, what’s next for tokenized securities?

Chuck Mack: Our filing with the SEC will be published for comment, and we look forward to hearing the different perspectives. In fact, part of the reason we filed this filing is to stimulate debate in a very transparent way.

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

Looking globally, it’s clear that tokenization adoption will be a broad conversation that requires coordination across the industry. Market infrastructure providers, regulators, issuers, asset managers, and fintechs will all play a role.

We welcome these discussions because they ultimately get to Nasdaq’s core purpose: advancing economic progress for all.

Economies thrive 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.

Author: Bootly.eth