Nasdaq Files SEC Proposal to Enable Tokenized Securities Trading

Core Insights - Nasdaq is moving towards integrating blockchain technology with traditional finance by filing with the SEC to allow trading of tokenized equities and ETPs on its platform [1][5] - The integration aims to enhance market efficiency, reduce settlement times, and automate trading processes while maintaining investor protections [2][4] Nasdaq's Initiative - The filing allows member firms and investors to choose between tokenized and traditional securities at order entry, with the DTC managing the clearing and settlement of tokenized assets [3][6] - Nasdaq's goal is to incorporate digital assets into its existing infrastructure, promoting financial innovation while ensuring stability and fairness [5][6] Benefits of Tokenization - Tokenized securities will represent digital versions of traditional shares, maintaining the same value and rights, thus preventing market fragmentation [6] - The initiative is part of a broader trend towards tokenization, which has seen significant growth, with the RWA market expanding from $5 billion in 2022 to $15 billion in 2023, marking a 308% increase [8] Industry Trends - Major financial institutions are increasingly adopting tokenization, as evidenced by BlackRock's BUIDL Treasury fund on Ethereum, which exceeded $500 million in mid-2024 [9] - The World Economic Forum has highlighted the potential for tokenization to enhance cross-border efficiency in financial transactions [9]