SEC Evaluation Marks First Significant Challenge for Nasdaq's Tokenized Stocks at DTCC's Entrance

SEC Review Initiation: The SEC has begun a formal review of Nasdaq's proposal to list tokenized securities, assessing how these blockchain-based shares can coexist with traditional equities while maintaining existing market safeguards.

Consultation Process: The SEC is seeking public feedback on the proposal, which aims to allow tokenized stocks to trade alongside conventional shares on the same order book, with settlement still managed by the DTCC.

Industry Reactions: While some industry groups support the proposal for its potential efficiency gains, firms like Ondo Finance and Cboe have called for a delay in approval until clearer guidance on tokenized settlement is provided by the DTCC.

Regulatory Focus: The review highlights the growing interest in tokenization within financial markets, emphasizing the need for legal certainty, settlement integrity, and investor protection as blockchain technology's adoption in equity trading is considered.