Wall Street's On-Chain Shift: The New York Stock Exchange and NASDAQ Compete to Lead in Securities Tokenization, transforming traditional financial markets through blockchain technology and digital assets.
Author: FinTax
1. Introduction
On January 19, 2026, the New York Stock Exchange announced that it is developing a blockchain-based tokenized securities trading platform, with plans to launch after obtaining regulatory approval. Previously, in September 2025, Nasdaq submitted a proposal for amendments to its tokenized securities rules, which is currently under SEC review.
As the two major Wall Street trading giants simultaneously explore blockchain, and as cryptocurrencies intersect with traditional systems, the question is no longer “whether” but “how.” To deeply understand the significance of this transformation, this article will first clarify the core principles of securities tokenization, compare the strategies and logical approaches of the two exchanges, and explore the impact of this trend on the crypto market and variables worth关注.
2. The Starting Point of the Transformation: What is Securities Tokenization?
Securities are legal certificates that record and represent certain rights. Securities tokenization refers to the process of converting traditional financial assets (such as stocks, bonds, fund shares, real estate, etc.) into digital tokens using blockchain technology. These tokens represent ownership, income rights, or other related rights to the underlying assets.
Securities serve to prove that their holders are entitled to the rights recorded on their certificates. The way securities are recorded has evolved several times. Initially, in the era of paper stock certificates, investors held physical certificates. Later, with electronic bookkeeping, stocks became records in the Depository Trust Company (DTC) database. Today, the discussion of securities tokenization involves moving this record onto the blockchain, forming a digital token.
DTC is the core clearing and settlement institution of the US securities market; almost all stocks traded in the US are ultimately registered and settled through DTC. Its database records information such as holder identity and share quantity, serving as the “general ledger” of the US securities market. Understanding DTC’s role is crucial to grasp the differences in the approaches of the two exchanges discussed below.
Once the essence of securities tokenization is understood, the next question is: given the same trend, what different answers have the two major exchanges provided?
3. Two Paths: Comparing the NYSE and Nasdaq’s Approaches
3.1 NYSE: Building a New On-Chain Trading Venue
The NYSE plans to establish a completely new, independent platform for tokenized securities. This platform will operate in parallel with the existing stock trading system but will use blockchain technology for post-trade clearing and settlement.
The core features of this platform can be summarized as four points:
First, 24/7 trading. The current US stock market is only open during specific hours on weekdays (9:30 am to 4:00 pm New York time), whereas the new platform aims to support round-the-clock, seven-day trading.
Second, real-time settlement. The existing stock market uses a T+1 settlement cycle, meaning trades executed today settle the next business day. The new platform plans to achieve immediate settlement after trade completion, enabling faster capital turnover and reducing counterparty risk.
Third, stablecoin financing. The platform will support settlement using stablecoins—digital currencies pegged to the US dollar with relatively stable value—allowing investors to transfer and settle funds outside traditional banking hours.
Fourth, fractional share trading. Investors will be able to buy stock shares by dollar amount rather than whole shares—for example, purchasing $50 worth of Apple stock without paying for a full share.
The NYSE explicitly states that holders of tokenized stocks will enjoy the same rights as traditional shareholders, including dividends and voting rights. In other words, this is not a synthetic asset or derivative but a true transfer of securities rights onto the blockchain.
3.2 Nasdaq: Adding Tokenized Settlement Options within the Existing System
Nasdaq’s approach is markedly different. Instead of building a new trading venue, Nasdaq intends to add an option for tokenized settlement within its current trading system.
Matt Savarese, head of Nasdaq Digital Assets, explained in an interview: “Investors can choose to hold stocks in a tokenized form on the blockchain or continue using traditional accounts. The essence of the stock remains unchanged—the trading code and the CUSIP (Committee on Uniform Securities Identification Procedures) number are identical. Tokenized and traditional forms are fully interchangeable and equivalent.”
Specifically, when investors buy or sell stocks on Nasdaq, the process is exactly the same—same order book, same prices, same trading rules. The only difference is in the settlement process: investors can choose to settle the trade traditionally or opt for tokenized settlement. If they choose the latter, the Depository Trust Company (DTC) will register the corresponding stocks as tokens on the blockchain.
Nasdaq’s tokenization feature will be activated once the relevant DTC infrastructure and necessary regulatory approvals are in place, with an expected launch as early as the third quarter of 2026.
3.3 Differences Between the Two Approaches
A simple analogy can help understand the difference: Nasdaq’s approach is akin to adding a digital bookkeeping option at an existing bank counter—customers still go to the same counter, use the same procedures, but choose to record their certificates on the blockchain. In contrast, the NYSE’s approach is like opening a new 24-hour digital bank next to the existing bank—this new bank uses a completely new system capable of offering services that traditional branches cannot.
Furthermore, the key differences between the two strategies mainly lie in the trading layer and the settlement layer:
- Trading Layer: NYSE builds a new independent platform; Nasdaq integrates into the existing system
The NYSE adopts a “parallel market” model, where tokenized securities are traded on a separate, dedicated platform. The same stock might be quoted simultaneously on the traditional main board and the tokenized platform.
Nasdaq employs a “single market” model, where tokenized stocks share the same order book and price discovery mechanism as traditional stocks. This ensures market liquidity is not fragmented and that trading experience remains seamless.
- Settlement Layer: NYSE aims for real-time (T+0) settlement; Nasdaq maintains T+1
This is the fundamental difference.
Nasdaq relies entirely on DTC’s existing tokenized services, using traditional funds. After trade completion, Nasdaq sends settlement instructions to DTC—blockchain merely adds a digital record on top of the existing registration system, without replacing it. This architecture offers clear compliance pathways and manageable systemic risk but cannot break the existing T+1 settlement cycle. Nasdaq has explicitly stated that initial tokenized securities will still settle on T+1.
The NYSE, on the other hand, plans to achieve real-time (T+0) settlement and support stablecoin settlement, fundamentally breaking the constraints of trading hours. Traditional markets require T+1 or longer settlement cycles because of processes like fund transfers, securities transfer, and clearing. This significantly impacts capital efficiency; according to SIFMA data, reducing the US market settlement cycle from T+2 to T+1 decreased the NSCC clearing fund size by about 29% (roughly $3.7 billion). The efficiency gains from real-time settlement are substantial.
4. Strategic Divergence: Why Do the Two Major Exchanges Choose Different Paths?
The NYSE and Nasdaq have chosen markedly different routes for securities tokenization, reflecting their distinct assessments of risks, opportunities, and market competition. Analyzing these strategic logics helps us understand the core considerations of traditional financial institutions applying blockchain technology.
4.1 Balancing Innovation and Risk Isolation
Nasdaq’s choice to integrate into the existing system offers advantages: faster deployment, minimal market disruption, and lower initial investment. However, this limits innovation—features like 24-hour trading and real-time settlement are difficult to implement within the current architecture. Essentially, Nasdaq views “tokenization as an incremental feature”—it believes most institutional investors will not abandon familiar trading processes in the short term. The value of tokenization lies in providing an optional alternative rather than disrupting the status quo.
The NYSE’s decision to build an independent platform prioritizes risk isolation. Running a separate system means that even if technical issues or regulatory disputes arise, the main NYSE trading floor remains unaffected. Additionally, an independent platform can be designed from the ground up to support 24/7 trading and instant settlement—features hard to realize within the current infrastructure. More deeply, this move positions the NYSE to be a foundational infrastructure for the next-generation market—once real-time settlement becomes standard, early movers will have significant technological and user advantages.
4.2 Compliance Strategies: Different Approaches within Regulatory Frameworks
Both exchanges place compliance at their core but adopt different strategies.
Nasdaq’s plan aims to operate within the existing regulatory framework. Matt Savarese emphasized: “We are not overturning the current financial system but gradually advancing tokenization under SEC regulation.” Nasdaq seeks to maximize reuse of existing compliance structures, minimizing regulatory uncertainty.
The NYSE, by contrast, takes a more ambitious route. Building a new trading venue, introducing stablecoin settlement, and enabling 24-hour trading all pose new regulatory challenges. However, the NYSE believes the current regulatory window is a rare opportunity—rather than waiting for rules to become fully clear and passively following, it prefers to actively shape the regulatory environment. This proactive, co-constructed approach to regulation could confer first-mover advantages if the regulatory environment becomes more friendly.
4.3 Ecosystem Positioning: Hub Platform vs. Value-Added Service Provider
Nasdaq’s positioning is more about providing value-added services to existing clients. Its plan essentially adds a technological option on top of current operations, allowing investors to choose tokenized holdings. This strategy offers low client migration costs and minimal adoption resistance but also means Nasdaq’s role in this transformation is more of a “follower” than a “leader.”
The NYSE’s strategy indicates a stronger intent to build an ecosystem. Its platform plans to provide non-discriminatory access to all qualified broker-dealers, aiming to become a hub connecting traditional financial networks with the digital asset world. This could activate the entire traditional financial system’s distribution capabilities. If successful, the NYSE could evolve from a single trading venue into a foundational infrastructure provider spanning both traditional and on-chain worlds—a business model with greater potential.
Both strategies have their merits; success largely depends on external factors—especially the pace of regulatory evolution. This leads to the next key question: what changes are occurring in US regulation, and how might these influence the implementation of both approaches?
5. From Resistance to Drive: Changes in the US Regulatory Environment
The active deployment of tokenized securities by the two exchanges is closely linked to fundamental shifts in US regulation. It is the improvement in regulatory expectations that has opened a window for traditional financial institutions to embrace blockchain.
5.1 Regulatory Paradigm Shift: From “Enforcement-Led” to “Rule-Led”
In recent years, SEC’s regulation of crypto assets has left the industry with a deep impression of “enforcement”—cases are numerous, boundaries are fuzzy, and expectations are uncertain. Innovation and compliance have long been in tension. However, after 2025, SEC’s narrative has shifted noticeably. It has begun to openly discuss “how to bring capital markets on-chain” and is exploring compliant pathways through exemptions, pilot programs, and classification frameworks for tokenized securities, on-chain trading, and clearing. This change stems from three realizations: blockchain settlement efficiency is now widely recognized; institutional demand for real-time, 24/7 trading is urgent; and the crypto industry has gained significant economic and political influence.
5.2 Legislative Breakthroughs: GENIUS Act and Stablecoin Regulation
In July 2025, the GENIUS Act was signed into law—the first federal legislation in the US specifically targeting stablecoins. It establishes a comprehensive regulatory framework requiring issuers to hold full reserves of USD or other low-risk assets on a one-to-one basis, with monthly disclosures certified by CEOs and CFOs.
Stablecoins are a key infrastructure for real-time settlement in the tokenized securities ecosystem. The NYSE explicitly plans to include stablecoin financing as a core feature of its new platform. The passage of the GENIUS Act provides legal certainty for stablecoins, removing major barriers for traditional financial institutions to participate. This explains why the NYSE dares to incorporate stablecoin settlement—legal uncertainties have been largely resolved.
5.3 Policy Coordination: Administrative and Regulatory Synergy
On January 23, 2025, President Trump signed an executive order titled “Strengthening America’s Leadership in Digital Financial Technologies,” explicitly supporting responsible growth of digital assets and blockchain, and establishing the President’s Digital Asset Market Working Group. In regulatory enforcement, the SEC established a dedicated cryptocurrency task force in January 2025, focusing on issuance, trading, custody, and other aspects of digital assets. From legislation to administration and enforcement, the US government’s attitude toward digital assets has shifted from cautious observation to active guidance. This policy synergy provides an essential institutional foundation for the two exchanges’ tokenization strategies.
Regulatory clarity will not only influence the implementation of both approaches but also profoundly reshape the entire crypto market landscape. How will this trend change capital flows, infrastructure, and compliance boundaries in crypto?
6. Market Impact and Future Outlook
6.1 Capital Flows: New Channels for Institutional Entry
As regulatory expectations become clearer, market participants are shifting from defensive to proactive strategies. The boundary between DeFi and CeFi is blurring. For institutional investors, the NYSE and Nasdaq’s tokenization plans offer compliant, trustworthy entry channels. A securities token trading platform with the NYSE’s reputation, operating fully within the regulatory framework, is highly attractive to institutional capital that values compliance and security. This could accelerate the inflow of previously hesitant funds into tokenized assets. Existing crypto trading platforms may face short-term pressure, but in the long run, the NYSE’s move effectively enhances the credibility of the entire asset tokenization sector, speeding up regulatory clarity and market maturity.
6.2 Infrastructure: Paradigm Shift in Settlement and Trading Mechanisms
Real-time settlement will reshape margin calculation models and significantly reduce counterparty risk. The geographic and temporal arbitrage space will shrink, and 24-hour trading will alter global market interconnectivity. On-chain liquidity aggregation could create new market depth, with potential emergence of specialized market makers, AMMs, and order book hybrids.
6.3 Compliance Boundaries: From “Gray Areas” to “Clear Rules”
Entry of traditional financial institutions will push the entire industry toward higher compliance standards. As a regulated entity, the NYSE and Nasdaq’s tokenization schemes must conform to existing securities laws, setting industry compliance benchmarks. Meanwhile, regulators are actively drafting specific rules for tokenized securities, gradually narrowing the “gray areas.”
6.4 Risks and Challenges
Technologically, seamlessly integrating mature traditional trading systems with blockchain is a complex engineering challenge. Issues include blockchain transaction throughput, interoperability between different chains, and smart contract security. Risks include immature cross-chain security tech and new on-chain market manipulation.
Despite regulatory improvements, fragmentation risks remain. The SEC and CFTC’s jurisdictional boundaries are still being clarified, and cross-jurisdictional rule recognition is pending.
Market habits also pose challenges—changing decades-old market conventions is not easy. Legal, compliance, and risk management teams need time to evaluate and trust this new model. The 24/7 market may also increase volatility, demanding higher risk management capabilities from investors.
6.5 Key Variables for Investors to Watch
Short-term (1-2 years): Progress of regulatory approvals. The Nasdaq plan is expected to launch as early as late 2026 Q3, while the NYSE has not announced specific timelines but will proceed after regulatory approval. DTC’s tokenization pilot is scheduled for late 2026.
Mid-term (3-5 years): Evolution of market structure. Tokenized asset scale is expected to grow significantly, with market makers’ roles transforming. Compliance tech will focus on programmable compliance protocols, cross-jurisdictional recognition, and privacy computing.
Long-term (beyond 5 years): Regulatory paradigm shift. Focus may shift from “institutional regulation” to “protocol regulation,” with code-based compliance becoming standard. Governance models may innovate, including tokenized proxy voting and real-time governance mechanisms.
7. Conclusion
In 1792, the NYSE was founded under a sycamore tree on Wall Street. Over two centuries later, it is moving from physical to on-chain. As Nasdaq stated in its proposal, the US stock market has experienced a transition from paper certificates to electronic bookkeeping; tokenization can be viewed as the latest chapter in this evolution. In this historic transformation, the biggest winners will be those entities and individuals who can transcend traditional and crypto mindsets, balancing regulation, innovation, and market dynamics to find optimal solutions first.