Wall Street accelerates its move to blockchain: Nasdaq receives approval for tokenization pilot program, S&P 500 makes its first official entry.

Author: Nancy, PANews

From a trial of less than $100 million to a scale exceeding $4 billion, tokenized stocks have completed the leap from proof of concept to mainstream penetration in just over a year.

Behind the exponential growth of the market, not only are native crypto players entering the fray, but traditional financial giants are also venturing into the "deep waters" with their core assets.

The SEC has officially given Nasdaq the green light to pilot tokenized stocks.

After six months of revisions and public consultation, the SEC officially approved Nasdaq's rule amendments on March 18, allowing a pilot program for trading securities in tokenized form on its exchange. This signifies the official launch of tokenized securities trading pilots on major US stock exchanges.

The pilot program for tokenized trading is being implemented by DTC (Depository Trust Company), a subsidiary of DTCC (Depository Trust and Clearing Corporation of the United States). The SEC has approved DTC to provide tokenization services for custodied assets, allowing it to offer tokenization services to participants and their clients on a pre-approved blockchain for a period of three years. The authorization covers highly liquid assets, including the Russell 1000 index, ETFs tracking major indices, and U.S. Treasury bonds.

The SEC filing emphasizes that tokenized securities are not a new product and will be fully incorporated into the existing securities regulatory framework. They will retain all the rights of traditional securities, such as ownership, dividend rights, and voting rights. Furthermore, the trading system, market structure, fee structure, and regulatory oversight will remain unchanged; the only change is in the settlement method. In other words, the original institutional logic of the exchange remains unchanged, but blockchain technology has been introduced as an alternative path for the underlying settlement process.

Under Nasdaq's plan, the pilot trading of tokenized shares is currently only open to eligible DTC participants and eligible securities, who can choose to trade in either traditional or tokenized form. Eligible transactions settled via tokenization will be executed by the DTC (e.g., by selecting a blockchain or wallet address). If a participant is ineligible, the assets do not meet the requirements, or the technology is not supported, settlement will automatically proceed via traditional methods.

Tokenized stocks and traditional orders will share the same order book, maintaining consistent queuing priorities, order matching mechanisms, and price discovery models. Traders can choose whether to enable tokenized settlement when placing an order. This avoids problems such as liquidity dispersion and trading fragmentation.

However, the initial pilot program has a limited number of constituent stocks, primarily including Russell 1000 index constituents and ETFs tracking major benchmark indices such as the S&P 500 and Nasdaq 100. From a selection perspective, these are asset classes with high liquidity, large market capitalization, and mature regulatory structures, rather than small or illiquid assets.

However, Nasdaq has also made it clear that tokenized trading based on the DTC pilot program is not the only model. Multiple tokenization methods may exist or emerge in the market, and any future adoption of other models will be subject to separate SEC approval.

In fact, in addition to this pilot program focusing more on tokenization at the transaction and settlement levels, Nasdaq is also simultaneously advancing a program for issuers.

Recently, Nasdaq announced a partnership with Kraken's parent company, Payward, to jointly develop plans to offer tokenized stocks and exchange-traded products (ETPs) on its exchange. The two companies plan to build a conversion system called the "Stock Conversion Gateway," allowing tokenized stocks to freely circulate between regulated traditional stock markets and permissionless blockchain networks. Both will use the same CUSIP code to ensure fungibility, and settlement will still be completed through the DTCC. This plan is still pending final approval from the SEC and is expected to officially launch in the first half of 2027.

With Nasdaq leading the way, the pool of tokenized stocks is rapidly expanding. In addition, traditional financial giants like the NYSE have also revealed they are developing a tokenized trading platform, and its parent company, ICE, recently announced an investment in OKX to accelerate this development.

Hyperliquid secures official authorization for the S&P 500's first blockchain application.

At almost the same time, another tokenization experiment was also underway in the on-chain market.

S&P Dow Jones Indices recently announced that it has licensed the S&P 500 index to Trade XYZ for the launch of the first and only officially licensed S&P 500 perpetual derivative contract on Hyperliquid.

This product targets qualified non-US investors, supports on-chain leveraged long and short trading, and directly uses institutional-grade S&P DJI index data. S&P states that this move extends the S&P 500 liquidity ecosystem onto the blockchain, enabling 24/7 trading and complementing existing on-exchange and off-exchange products such as futures, options, and ETFs.

As one of the world's most important stock indices, the S&P 500 tracks the 500 largest and most representative companies listed on major U.S. exchanges, with daily trading volume of its related derivatives (futures, options, ETFs, etc.) exceeding $1 trillion. It is not only a barometer of the U.S. economy but also a core tool for global investors to allocate dollar assets and participate in U.S. growth.

This "on-chain" move signifies that this nearly 70-year-old index has achieved 24-hour trading for the first time. Furthermore, unlike the Nasdaq approach, the S&P 500 index's entry into the on-chain perpetual market bypasses the traditional exchange system and is seen as a significant step towards global asset on-chaining.

In fact, S&P Global has been accelerating its crypto strategy in recent years, including launching a crypto index, releasing a DeFi index, rating stablecoins and tokenized government bond funds, launching a crypto ecosystem index, and collaborating with blockchain projects to promote tokenized funds.

TradeXYZ is the largest RWA perpetual market on Hyperliquid, and its contracts for traditional assets such as crude oil are attracting attention from Wall Street funds. Since October 2025, the market's trading volume has exceeded $100 billion, with an annualized trading volume of over $600 billion. For Hyperliquid, the inclusion of the S&P 500 not only expands its liquidity but, more importantly, gains brand endorsement, potentially attracting more TradeFi products to the blockchain in the future.

Currently, Trade.xyz has deployed the S&P 500/USDC trading pair on the Hyperliquid platform via the HIP-3 protocol, supporting leverage up to 50x. As of this writing, the asset's cumulative trading volume has exceeded $39 million, and open interest has rapidly climbed to $24 million.

From Nasdaq to Hyperliquid, tokenization is progressing along two paths. One is centered on traditional finance, introducing blockchain into existing markets to restructure clearing and settlement processes; the other is directly rebuilding the trading system on-chain, mapping traditional assets into crypto derivatives that can be traded 24/7.

However, one clear trend is that global financial assets are rapidly migrating to the blockchain.