What is tokenization?

Nasdaq is advancing the modernization of global capital markets by integrating blockchain technology into equity infrastructure through its Nasdaq Equity Token (NET) design. This initiative, which follows a September 2025 proposal to the U.S. Securities and Exchange Commission, aims to enable equity securities to trade and settle in tokenized form while maintaining full regulatory equivalence. Unlike synthetic or custodial models, the NET design ensures that token transfers represent direct ownership of the underlying security, with records integrated into the issuer's official share registry. By embedding standardized data and automation directly into digital securities, Nasdaq seeks to streamline corporate actions and settlement processes, which currently incur over $58 billion in annual industry costs. The framework prioritizes issuer control, allowing companies to manage investor relationships and governance more effectively in both permissioned and permissionless environments. This shift is intended to support the transition toward always-on, continuous trading markets by reducing manual handoffs and data reconciliations. Ultimately, Nasdaq views this as a critical evolution to improve operational efficiency and liquidity while preserving the investor protections inherent in regulated public markets.