Nasdaq, a major US stock exchange, has made obtaining approval from the SEC (Securities and Exchange Commission) a paramount priority for its proposal to offer tokenized versions of stocks listed on its exchange.
Matt Savarese, Nasdaq’s Head of Digital Asset Strategy, pledged in an interview, “We are going to move as quickly as we can.” This swift approach underscores Nasdaq’s deep interest in integrating tokenization technology with Traditional Finance (TradFi) markets.
SEC Approval is the Top Priority
Nasdaq submitted its proposal to the SEC on September 8th. This proposal requests permission to allow investors to buy and sell stock tokens, which are digital representations of publicly traded companies’ shares, on the market.
Savarese emphasized transparency regarding the process: “We really have to evaluate where the public comments come from and then answer the SEC questions.” Nasdaq is banking on working with regulators “as quickly as we can.”
Crucially, Savarese stated that Nasdaq has a responsible, investor-led approach, meaning they want to make this shift within the confines of SEC rules. This is a key strategy that aims to enable the widespread acceptance of tokenization by ensuring regulatory compliance.
Enhancing the System, Not Overthrowing It
Savarese stated that Nasdaq, citing its history as the first entity to move markets from paper-based trading to electronic systems, wants to remain an innovator in this technological revolution.
When asked if other major markets would follow suit, Savarese stressed that Nasdaq is not attempting to overturn the market system:
“We’re not looking to overthrow the system; we want everybody to come along with us on this journey to bring tokenization more into practice.”
However, this view is not universal. Vlad Tenev, CEO of Robinhood, expressed an aggressive prediction that tokenization will “eventually eat the whole financial system.” This highlights the ideological difference between Nasdaq’s stance, which seeks to integrate with traditional markets, and the revolutionary vision of crypto enthusiasts.
Tokenization: A Divide Within the Crypto Sector
Tokenized stocks, due to their potential to bring Real World Assets (RWAs) onto the blockchain, have ignited intense debate and division within the crypto industry itself.
Pioneer Support
Leaders like Mike Novogratz, CEO of Galaxy Digital, have championed and implemented tokenization. He announced that his firm was the first Nasdaq-listed company to tokenize its equity on the Solana network. This is viewed as the first major example of bridging the gap between crypto and traditional markets.
Skepticism and the Leakage Issue
However, some crypto-native firms remain skeptical. Rob Hadick, a General Partner at crypto VC firm Dragonfly, suggested that tokenized stocks might be a net positive for Traditional Finance (TradFi), but not the massive boon to the crypto sector that others expect.
The reason is that when these tokenized stocks use Layer-2 networks or sidechains, the value created often remains within the TradFi customer base. Hadick argues that this prevents investment liquidity from “leaking” into and boosting the native crypto ecosystems, such as Ethereum.
The Next Phase of Financial Infrastructure
Nasdaq Head Matt Savarese’s commitment to swift action indicates that tokenization is not just a technological experiment, but the inevitable next step for global financial infrastructure. If Nasdaq succeeds in working with the SEC to gain approval, it will usher in a new era where investors benefit from 24/7 trading, lower settlement costs, and increased transparency. This is a crucial move that breaks down the barrier between traditional markets and blockchain technology.
