In a major step toward modernizing U.S. equity market infrastructure, the exchange operator Nasdaq has made it clear that bringing tokenized stocks under formal regulatory approval is now one of its highest priorities. In recent remarks, Matt Savarese, who leads the exchange’s digital assets division, said the company is working rapidly with the U.S. Securities and Exchange Commission to advance its proposed rule change that would allow blockchain-based representations of publicly listed equities to trade under the same well-established framework that governs traditional securities today.
Speaking in an interview with CNBC, Savarese emphasized that the initiative is not an attempt to bypass the existing regulatory architecture or introduce speculative new financial instruments. Instead, the exchange aims to integrate tokenization directly into the national market system, preserving the investor protections, disclosure standards, and settlement processes that anchor the U.S. capital markets.
“We’re not creating a new exotic instrument. The stock is the stock,” Savarese stressed, making it clear that tokenized shares would carry all the conventional rights associated with equity ownership—including voting privileges, dividends, and full shareholder title. “Our goal,” he added, “is to bring this technology into the mainstream responsibly, using rules that already exist and have protected investors for decades.”
A Proposal Grounded in Familiar Market Mechanics
Nasdaq’s rule filing—submitted in September and now moving through the public comment and review stages—would allow equity securities and exchange-traded products already listed on the exchange to trade in a new digital form. These “stock tokens” would function as on-chain representations of the same shares currently settled and custodied through traditional clearing channels.
Crucially, the exchange does not propose creating parallel markets or separate tickers. Instead, tokenized shares would remain fully fungible with their conventional counterparts, trading under the same ticker symbols and CUSIP identifiers. Orders would continue to route through the standard Nasdaq order book, under the same SEC oversight, the same national market system rules, and the same market-surveillance infrastructure.
Savarese described this model as a continuation of the exchange’s long tradition of technological transformation. Nasdaq helped lead the shift from paper-based share certificates to fully electronic trading decades ago, and he compared tokenization to that earlier modernization effort. “It’s evolutionary. It’s not revolutionary,” he said. “Markets don’t change overnight. They change through responsible steps that bring everyone—investors, issuers, clearing firms—forward together.”
The Depository Trust Company, the backbone of U.S. securities custody, would remain central in this system. Clearing firms would handle tokenized settlements alongside traditional ones, enabling seamless back-and-forth conversion between digital and conventional equity formats.
Post-Trade Efficiencies Lead the Near-Term Impact
While some observers focus on the possibility of faster settlement times, Nasdaq’s digital assets team is taking a measured approach. Savarese explained that the exchange is prioritizing near-term operational efficiencies before pursuing accelerated settlement cycles like T+0.
The first wave of benefits will center on the back-end: post-trade reconciliation, accuracy, and the ability for firms to maintain synchronized books across traditional and blockchain rails. By enabling atomic settlement and eliminating certain manual processes, tokenization could reduce errors and lower operational costs without requiring firms to overhaul their existing systems.
One of the most significant medium-term advantages is enhanced collateral mobility. Tokenized shares can be moved instantly between custodial structures and collateral pools, potentially transforming how banks and broker-dealers manage their capital requirements. With real-time movement of pledged assets, firms could dramatically reduce overcollateralization—capital that currently sits idle as a safety buffer.
“Tokenized equity can let you take an asset, put it into a collateral pool, and move it instantaneously,” Savarese noted. “This creates genuine capital efficiency. You’re reducing friction in how collateral flows through the system.”
Nasdaq’s recent acquisition of Calypso through its Adenza deal gave the exchange what Savarese described as “the gold standard in collateral management software.” Now integrated with blockchain technology, that system can support instantaneous asset pledging, margin movement, and smart-contract-based workflows.
Long-Term Vision Smart Contracts and Automated Market Infrastructure
Looking further ahead, the implications grow even more sweeping.
Tokenized equities could eventually support programmable corporate actions, including automated dividend distribution, instant proxy-vote tracking, and real-time governance updates. By moving these processes onto shared blockchain rails, issuers and investors could benefit from greater transparency and fewer intermediaries.
Smart contracts may also automate compliance and workflow tasks that currently require manual intervention. For example:
- Automated dividend calculations tied directly to ownership records
- Real-time settlement finality, reducing counterparty exposure
- Instantaneous securities lending transactions
- Transparent recordkeeping for proxy votes, potentially reducing errors and miscounts
- Programmable restrictions for restricted stock or lock-ups
Yet Savarese underscored that these capabilities will unfold gradually. Integrating smart-contract settlement with a system as vast and interconnected as the U.S. markets requires extensive coordination among exchanges, brokers, custodians, issuers, and regulators.
Regulatory Path Remains the Critical Gatekeeper
After filing in September, Nasdaq’s proposal entered the official public comment period. Responses closed in mid-October, and the SEC is now reviewing the matter. Although the timeline for approval remains uncertain—particularly amid broader government disruptions and shifting administrative priorities—Savarese said the exchange is pushing forward aggressively.
“We will move as fast as we can with the SEC,” he said, noting that tokenization is widely viewed as a priority topic for financial modernization.
At the regulatory level, digital asset classification remains a hot-button issue. Paul Atkins, the current SEC Chair, has directed the agency to articulate clearer rules governing digital asset categories. Meanwhile, Commissioner Hester Peirce has reiterated her support for working collaboratively with tokenization initiatives—provided they maintain full and transparent disclosures about asset characteristics.
This alignment could bode well for Nasdaq’s application, which emphasizes its minimal disruption to existing market protections.
“We’re not looking to upend the system,” Savarese repeated. “We want everyone to come along with us for the ride. Tokenization can move into the mainstream, but only if we do it in a responsible, investor-first way.”
A New Era for U.S. Markets—But an Incremental One
The tokenization of stocks—the idea that equities could exist simultaneously in traditional and blockchain formats—is no longer a speculative concept. With one of the world’s largest exchanges driving the initiative and framing it squarely within existing regulatory structures, the U.S. capital markets may be on the cusp of their next major evolution.
The process will not be instantaneous. It will unfold in stages:
- Back-office efficiency gains
- Digitally mobilized collateral and improved liquidity flows
- Eventual modernization of corporate-actions and governance processes
- Long-term automation via smart contracts
But if adopted, Nasdaq’s model could lay the groundwork for a hybrid financial infrastructure where blockchain technology enhances—not replaces—the legacy systems that have supported global markets for generations.
“It’s evolutionary,” Savarese said. “And evolution, when done right, is exactly how markets scale into the future.”
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