Nasdaq's Commitment to Tokenized Stocks and Crypto Integration
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The U.S. Nasdaq stock exchange is prioritizing the SEC approval of its proposal to offer tokenized versions of stocks. Matt Savarese, Nasdaq's head of digital assets strategy, stated in an interview with CNBC that they aim to move as quickly as possible on this initiative.
The proposal, submitted on September 8, 2023, seeks permission for investors to buy and sell stock tokens, which are digital representations of shares in publicly traded companies. Savarese indicated that the exchange is not attempting to overhaul the traditional investment system but instead wants to bring tokenization into the mainstream responsibly, adhering to SEC guidelines.
The conversation around tokenized stocks has gained traction in the crypto industry, with figures like Robinhood CEO Vlad Tenev predicting that tokenization could revolutionize the financial system. However, skepticism remains, particularly regarding the impact of tokenization on the broader crypto ecosystem.
On October 1, 2023, Rob Hadick, a general partner at Dragonfly, expressed concerns that while tokenized equities may benefit traditional markets, they might not significantly enhance the crypto space as anticipated.
He noted that using layer-2 networks for tokenized stocks could lead to value leakage, preventing it from flowing back to Ethereum or the larger crypto ecosystem. This reflects a divided sentiment within the crypto industry regarding the future of tokenized equities.
Notably, Galaxy Digital CEO Mike Novogratz announced on September 3, 2023, that Galaxy Digital became the first Nasdaq-listed company to tokenize its equity on a major blockchain, following its launching on the Solana network.
Overall, Nasdaq's efforts to integrate tokenized stocks could mark a pivotal shift in how stocks are traded, potentially bridging the gap between traditional finance and the burgeoning world of cryptocurrency.
Sources indicate that Nasdaq aims to innovate within this ecosystem, building on its history of transitioning from paper-based trading to electronic systems, marking a significant development in the ongoing evolution of financial markets and blockchain technology.