On April 9, 2026, the New York Stock Exchange (NYSE) officially submitted a rule amendment proposal (File No. SR-NYSE-2026-17) to the U.S. Securities and Exchange Commission (SEC), seeking to add Rule 7.50. This new rule would allow eligible securities to be traded and settled in tokenized form on the exchange. This move marks another significant step by a major U.S. securities exchange toward the tokenization of securities, following the SEC’s approval of a similar rule change by Nasdaq on March 18, 2026.
How Tokenized Securities and Traditional Securities Trade Side by Side on a Unified Order Book
According to the proposal, tokenized securities must share the same CUSIP number and trading symbol as their traditional counterparts and grant holders identical shareholder rights. Only then can they be listed on the same order book and traded with equal priority. This means that within the order matching system, both tokenized and traditional versions of the same security will follow identical execution priority rules—namely, price-time priority—regardless of how the asset is represented. Technically, eligible market participants can use a "tokenization flag" when entering orders to indicate their preference for on-chain clearing and settlement. This approach ensures that tokenization does not create a new asset class but rather introduces blockchain as an optional settlement channel within the existing securities framework.
Why the DTC Tokenization Pilot Is the Backbone of Tokenized Securities
Any discussion of tokenized securities inevitably centers on the Depository Trust Company (DTC), a subsidiary of the Depository Trust & Clearing Corporation (DTCC). DTC serves as the central securities depository in the U.S., safeguarding over $100 trillion in securities assets. On December 11, 2025, the SEC’s Division of Trading and Markets issued a no-action letter allowing DTC to operate a three-year tokenization pilot program. DTC’s approach uses a "parallel tracks" model: in the traditional mode, securities ownership is recorded on DTC’s centralized ledger; in the tokenized mode, DTC’s proprietary "Factory System" mints tokens on a blockchain representing "tokenized interests" in the underlying stocks, which DTC continues to hold. The LedgerScan system tracks every token transfer to ensure that on-chain records always match the internal ledger. The pilot is strictly limited to Russell 1000 Index constituents, U.S. Treasuries, and ETFs tracking the S&P 500 and Nasdaq 100—all highly liquid asset classes. The NYSE’s proposal builds directly on this pilot framework.
Industry Insights from Nasdaq’s Approved Tokenized Securities Rule
On March 18, 2026, the SEC approved Nasdaq’s rule change proposal (SR-NASDAQ-2025-072), allowing certain securities to be traded in tokenized form on the Nasdaq Market Center. Nasdaq’s rule modification includes four key elements: first, it redefines "security" to clarify that both traditional and tokenized forms represent the same security; second, it introduces a "tokenization flag" for DTC-eligible participants to select tokenized settlement at order entry; third, it maintains a unified order book and identical execution priority; and fourth, it preserves tokenization instructions when routing orders across venues. These principles closely align with the NYSE proposal, signaling that both exchanges are working toward standardizing security tokenization. Notably, Nasdaq has also partnered with Payward to create a conversion channel, enabling tokenized stocks to move between regulated markets and on-chain venues. The NYSE has previously announced plans to develop a new blockchain-based trading platform aimed at enabling 24/7 trading and real-time settlement of tokenized stocks and ETFs, though this platform still awaits regulatory approval.
How Shared CUSIPs and Equal Rights Form a Compliant Regulatory Framework
On January 28, 2026, the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets jointly issued a "Statement on Tokenized Securities." This statement clearly defined two main categories of tokenized securities and set the boundaries for the application of federal securities laws, signaling a shift in U.S. oversight from "enforcement deterrence" to "regulatory clarity." The statement repeatedly emphasized that "form does not alter substance"—regardless of how a security is represented, federal securities law requirements for registration, disclosure, and anti-fraud apply equally. In the NYSE proposal, tokenized securities must share the same CUSIP number as traditional securities, forming the technical foundation of the compliance framework. The CUSIP is the unique identifier for U.S. stocks and registered bonds; sharing it means tokenized securities are legally identical to their traditional counterparts, not separate financial instruments. All existing regulatory rules—including short sale regulations, risk management, and market surveillance—apply equally to tokenized securities, with no need for parallel market structures or major exemptions.
Potential Impact of Tokenized Securities on Liquidity, Market Makers, and Market Structure
The introduction of tokenized securities on mainstream exchanges could have far-reaching effects on market structure. On the positive side, tokenization enables 24/7 trading and fractional ownership, potentially broadening market participation and boosting liquidity. However, leading market maker Citadel has expressed caution to the SEC, warning that tokenized securities could siphon liquidity from traditional stock markets and create new liquidity pools inaccessible to institutional investors. If tokenization continues to expand and impacts the underlying stock market, market makers, brokers, and investors may find themselves operating both on-chain and off-chain, heightening risks of liquidity fragmentation and price dislocations. Additionally, in an open letter in October 2025, the World Federation of Exchanges raised concerns that adopting blockchain technology in mature equity markets could bring costs that outweigh the benefits, with tokenized stocks potentially undermining market integrity and leading to regulatory fragmentation. These differing views highlight that the market structure impact of tokenized securities remains to be tested in practice.
How Growth in the Tokenized RWA Market Signals Accelerating Institutional Adoption
Securities tokenization is not an isolated phenomenon but part of a broader wave of real-world asset (RWA) tokenization. Recent data shows that the global value of tokenized real-world assets has reached approximately $24.9 billion, nearly quadrupling year-over-year, with over $18 billion in new assets added this year alone. As of early April 2026, the tokenized RWA market had grown further to $27.65 billion, with robust quarterly growth. Tokenized U.S. Treasuries and commodities have been the main growth drivers, with their combined tokenization exceeding $16 billion and accounting for about 58% of overall market expansion. On-chain RWA holders now number over 663,000, with about 169,000 on the Ethereum network. The surge in institutional capital entering the space signals a growing demand from traditional financial institutions for blockchain-based asset infrastructure, and the NYSE and Nasdaq tokenized securities proposals are institutional responses to this trend at the mainstream exchange level.
Conclusion
The NYSE’s submission of a tokenized securities rule amendment to the SEC marks a pivotal moment in the adoption of blockchain technology by major U.S. securities exchanges. Anchored by DTC’s three-year tokenization pilot, the proposal requires tokenized securities to share CUSIP numbers, trading symbols, and shareholder rights with traditional securities, and to be traded on the same order book with equal priority. The settlement cycle remains T+1. The SEC’s January 2026 "Statement on Tokenized Securities" provides clear regulatory guidance for this transformation. On a broader scale, the global tokenized RWA market reached about $27.65 billion by early 2026, with sustained institutional inflows and regulatory innovation by mainstream exchanges driving momentum. However, risks such as liquidity fragmentation, market maker competition, and regulatory fragmentation warrant ongoing attention. Whether tokenized securities can truly integrate into traditional financial infrastructure will ultimately depend on regulatory approval and market participants’ acceptance.
Frequently Asked Questions
Q: What are the core rules of the NYSE tokenized securities proposal?
A: The proposal requires tokenized securities to share the same CUSIP number, trading symbol, and shareholder rights as traditional securities in order to be traded on the same order book with equal priority. Initially, the scope is limited to Russell 1000 Index constituents and ETFs tracking major indices. The settlement cycle remains T+1, and existing regulatory rules apply equally to tokenized securities.
Q: Do tokenized securities and traditional securities have the same trading priority?
A: Yes. In the order matching system, both tokenized and traditional versions follow identical execution priority rules—price-time priority—regardless of the asset’s form.
Q: What is the role of the DTC tokenization pilot?
A: The DTC tokenization pilot provides the foundational infrastructure for clearing and settling tokenized securities. DTC’s proprietary "Factory System" mints tokens on the blockchain, while the LedgerScan system ensures that on-chain records always match the internal ledger. The three-year pilot is limited to Russell 1000 Index constituents and major index ETFs.
Q: How does the SEC regulate tokenized securities?
A: On January 28, 2026, three SEC divisions jointly issued a "Statement on Tokenized Securities," clarifying that tokenized securities remain fully subject to federal securities laws—"form does not alter substance." The SEC has shifted from "enforcement deterrence" to "regulatory clarity," providing compliance guidance for market participants.
Q: What market impacts could the launch of tokenized securities have?
A: Potential positive impacts include 24/7 trading, fractional ownership, and increased liquidity. Risks include liquidity migration from traditional markets, changes in market maker competition, and regulatory fragmentation. The actual market structure effects remain to be validated in practice.
Q: How large is the tokenized RWA market today?
A: As of early April 2026, the tokenized RWA market had reached about $27.65 billion, showing significant growth. Tokenized U.S. Treasuries and commodities are the main growth drivers, and the number of on-chain RWA holders has surpassed 663,000.
