Nasdaq Secures SEC Approval To List Blockchain Version Of Stocks, Including S&P 500-Tracking ETFs

Core Viewpoint - The SEC has approved Nasdaq's proposal to allow certain stocks to be traded and settled in tokenized form, marking a significant step towards the integration of blockchain technology in traditional equity markets [1][2]. Group 1: SEC Approval and Proposal Details - The SEC found Nasdaq's proposal to be "consistent" with the Securities Exchange Act of 1934 and the rules governing national securities exchanges [2]. - The initial scope of the proposal includes constituents of the Russell 1000 and exchange-traded funds that track the S&P 500 and Nasdaq 100 [2]. - Nasdaq proposed to allow its member firms to tokenize "certain" equity securities and exchange-traded products [2]. Group 2: Tokenization Process - Investors will have the option to choose between a tokenized form or a traditional digital form of the stock [3]. - If investors opt for the tokenized method, the Depository Trust Corporation will handle the backend processes and list the asset as a blockchain-based token [3]. - All shares, regardless of their form, will be traded on Nasdaq under the same order entry and execution rules [3]. Group 3: Industry Developments - This SEC approval follows Nasdaq's partnership with cryptocurrency exchange Kraken to develop a framework for trading tokenized stocks and ETFs [4]. - Earlier in the year, Nasdaq strengthened its partnership with CME Group to relaunch the Nasdaq Crypto Index as the Nasdaq CME Crypto Index [4]. Group 4: Market Reaction - Shares of Nasdaq experienced a decline of 0.51% in after-hours trading, closing 1.19% lower at $85.44 during the regular trading session [5].