US SEC Advances Proceedings to Enable Nasdaq Launch Tokenized Securities Trading

Core Viewpoint - The US SEC is advancing proceedings to consider Nasdaq's proposal for trading tokenized securities, which includes stocks, on its exchange, following a no-action letter to the DTCC regarding real-world asset tokenization services [1][2]. Group 1: SEC Proceedings and Comments - The SEC is seeking additional comments to evaluate whether to approve or deny Nasdaq's proposed rule change for listing and trading tokenized securities, citing legal and policy issues [2]. - Support for the proposed rule change has been received from the Securities Industry and Financial Markets Association, while opposition has come from Cboe Global Markets, Better Markets, and Ondo Finance [3]. Group 2: Benefits and Concerns of Tokenization - Tokenization of securities is expected to enhance transparency, accelerate settlement times, and improve market efficiency for issuers and investors [4]. - The SEC is requesting comments on investor protection, market integrity, and technological safeguards, emphasizing the need to maintain existing regulatory standards and mitigate risks such as fraud and market manipulation [4]. Group 3: DTCC and Market Developments - The SEC has issued a no-action letter to the DTCC, allowing it to tokenize certain custody assets, which is seen as a step towards bridging traditional finance and decentralized finance [5]. - Securities transactions on Nasdaq will clear and settle in tokenized form at the DTC upon SEC approval, marking a significant advancement towards potential approval [6]. - The U.S. Commodity Futures Trading Commission has also agreed to allow tokenized assets as collateral in derivatives markets, indicating a broader acceptance of digital assets [6].