It took roughly three weeks for someone to attempt to list stocks on a blockchain at any significant scale. By early May 2021, German and British regulators had had enough of Binance’s April 2021 introduction of tokenized stocks. The item disappeared. Before it collapsed spectacularly in late 2022, FTX was operating something similar, taking with it whatever credibility that specific area of cryptocurrency finance had managed to build. The concept wasn’t entirely incorrect. The issue was the execution, which was constructed outside of the conventional market infrastructure and functioned in a regulatory gray area that authorities were never going to abandon.
The current situation is distinct enough to warrant careful consideration. Nasdaq’s proposal to permit some stocks and ETFs to trade in tokenized form alongside their traditional versions was approved by the SEC last week. The Depository Trust Company, which discreetly manages the great majority of US securities trades, will still handle settlement.
| Category | Details |
|---|---|
| What are tokenized stocks | Traditional equities represented in blockchain-based digital form, enabling near-instant settlement, 24/7 trading, and fractional ownership |
| SEC approval (March 2026) | Approved Nasdaq’s proposal to allow certain stocks and ETFs to trade in tokenized form; settlement still runs through the Depository Trust Company (DTC) approved |
| Eligible instruments | Russell 1000 stocks and major index ETFs |
| Key institutional players | Nasdaq, ICE (NYSE parent), JPMorgan Chase, BlackRock, Robinhood, Kraken |
| Previous failed attempts | Binance launched tokenized stocks in 2021 — shut down within weeks after German and UK regulatory pushback; FTX also offered them before collapse prior failures |
| Current U.S. settlement standard | T+1 — trades settle one business day after execution |
| Institutional concern | Instant settlement requires fully prefunded trades, raising financing costs and straining liquidity — especially at market close friction |
| Retail trading share | ~20% of U.S. equity volume overall; up to 50%+ in individual meme stocks |
| Market size forecast | Citigroup projects tokenized securities could reach $4–5 trillion by 2030 projection |
| Official reference | WSJ: Tokenized Stocks Are Coming to a Market Near You (wsj.com, March 2026) |
Major index ETFs and Russell 1000 stocks are examples of eligible instruments. The New York Stock Exchange’s owner, ICE, is developing a substitute platform. This month, regulators clarified that holding tokenized securities will not result in additional capital charges for banks. This time, the infrastructure being put together isn’t attempting to get around the system. It’s attempting to perch on top of it.
As this develops, it seems as though the financial establishment has quietly chosen to embrace blockchain rather than oppose it. This decision is not motivated by enthusiasm, but rather by a practical assessment that the rails are beneficial even if the underlying ideology is not. By tokenizing physical assets and experimenting with digital settlement infrastructure, JPMorgan Chase and BlackRock were already taking steps in this direction. From the cryptocurrency side, Robinhood and Kraken had been moving in the same direction from below. The two currents have now come together in the middle, within a regulatory framework that ICE and Nasdaq negotiated for years.
Tokenized stocks have a fairly simple pitch. Securities could move more quickly, be less expensive to transfer, and be simpler to incorporate into digital financial systems with blockchain-based settlement. It becomes easier to own fractions.
Theoretically, investors in Jakarta or Lagos could hold a portion of an S&P 500 ETF directly in a digital wallet without having to go through the many layers of middlemen that currently separate a foreign retail investor from a U.S. stock. Tokenized securities could have a total value of four to five trillion dollars by 2030, according to Citigroup. That figure is mentioned so frequently that it is beginning to feel more like a consensus than a forecast.
However, there is a complication at the heart of this tale that merits attention. Large institutional trading firms are uncomfortable with tokenized stocks because of the very feature that attracts retail investors: instant settlement and trades that complete as soon as they are executed. T+1, or one business day following a trade, is the standard used in the United States. Inefficiency is not the cause of that gap.
Working capital is what it is. It enables trading firms and brokers to manage funding flows, net positions, and absorb the friction associated with handling high transaction volumes throughout the day. That buffer is eliminated by instant settlement. Before any trade could take place, it would have to be fully funded.
In short, institutional investors typically dislike instant settlement, according to Reid Noch, vice president of U.S. equity market structure at TD Securities. He pointed out that no one actually wants to be prefunded. A liquidity facility that replicates the funding flexibility of T+1 in an instantaneous settlement world might be designed to allay this worry.
However, there is currently no such solution, and the market close, when massive amounts of trades land at once, is a particularly vulnerable time. These windows may become less liquid and more costly due to balance sheet constraints, which would disperse trading costs in ways that are difficult to predict beforehand.
Retail investors are therefore more likely to be early adopters, especially those from outside the US who presently encounter significant obstacles when trying to access US equity markets. Approximately 20% of all U.S. equity volume currently comes from retail, and in some individual stocks, that percentage rises to over 50%. The meme stock era served as an example of how much concentrated retail participation can influence a market. The liquidity dynamics of individual names may change in ways that institutional desks aren’t fully pricing in yet if tokenized stocks further reduce the bar for global retail participation.
Whether institutional resistance solidifies into a long-lasting split—traditional shares for the major players, tokenized versions for everyone else—or whether the two versions eventually converge as infrastructure catches up with ambition is still up for debate.
The change in the direction of travel appears to be less ambiguous. The parent company of the NYSE and Nasdaq are no longer at the forefront of an experiment. With the regulatory approval that the previous generation of tokenized equity products never had, they are constructing the exchange architecture for whatever comes next. In March 2026, the barriers that had previously prevented blockchain from entering stock markets were quietly taken down, and on Monday morning, those who work in those markets are still figuring out how this will affect their jobs.
