The U.S. Securities and Exchange Commission has approved aproposal from Nasdaq to test trading in tokenized versions of equities andother securities. This follows Nasdaq’searlier statements that tokenized shares could enable faster settlement,potentially moving toward “instant or atomic settlement,” though infrastructureremains a constraint.Join the inaugural FinanceMagnates Singapore Summit 2026, which will bring together brokers,fintechs, banks, EMIs, wealth managers, and hedge funds across APAC.The exchange submitted the plan in September. It proposed apilot that would allow certain widely traded stocks to be bought and soldeither in their conventional form or as blockchain-based tokens on the sameplatform. The initiative will involve the Depository Trust Company, whichprovides core post-trade infrastructure in U.S. markets.Tokenized Shares Mirror Traditional Stock RightsUnder the structure outlined in the filing, tokenized shareswill not be treated as separate instruments. They will be listed under the sameticker, match the same price, and trade within the same order book as standardshares. Investors will also retain identical rights regardless of the format.Tokenization refers to the process of representing financialassets on distributed ledger systems. Large financial institutions haverecently increased testing in this area, focusing on reducing settlement timesand enabling trading beyond standard market hours.The SEC said participation in the pilot will be restricted.Only “eligible participants” will be allowed to access tokenized trading. Theseparticipants can choose between traditional and tokenized formats whenexecuting trades.Nasdaq receives SEC nod for trading in tokenized securities https://t.co/IM3avyH0J0— Reuters Legal (@ReutersLegal) March 19, 2026SEC Addresses Tokenization Surveillance ConcernsThe pilot will include large-cap U.S. equities and majorindex-linked funds. Eligible securities cover stocks in the Russell 1000 Index,as well as ETFs linked to the S&P 500 and Nasdaq-100.During the SEC review, some comments raised concerns abouthow the model would handle market surveillance and whether tokenized andtraditional shares could trade at different prices. The regulator said theseissues were addressed through a revised submission that provided additionaloperational details.The approval follows Nasdaq’s broader tokenizationinitiatives. Earlier in March, the exchange said it would work with Kraken toallow securities to be converted into tokenized formats for blockchain use. Theprogram also includes a framework for companies to create and issue their owntokenized shares.Other market operators are pursuing similar moves.Intercontinental Exchange recently invested in OKX to develop tokenized equityproducts.This article was written by Tareq Sikder at www.financemagnates.com.