Tokenized Securities
Tokenization is the conversion of real-world or digital assets (like real estate or a piece of artwork) into blockchain tokens. When something is “tokenized” it is put “on chain,” shorthand for being represented on a blockchain.
Each token reflects a piece of ownership in that asset, allowing it to be stored, traded, and transferred securely online.
This concept is now applied in finance through what are known as tokenized securities.
What are tokenized securities?
Tokenized securities turn traditional financial instruments, such as stocks, funds, or real estate, into tokens on a blockchain.
They work just like regular securities, carrying dividends, voting rights, and ownership shares, but everything is created and managed digitally.
The process starts when a company creates a financial product, like a share or a bond, and tokenizes it. When someone buys a tokenized share, the blockchain automatically records the transaction, making it easier to track ownership and transfer assets securely.
The steps mirror traditional markets, but trades can be completed faster, with more transparency and fewer middlemen.
Tokenized vs. traditional securities
The following is a general comparison of traditional vs. tokenized securities, though some nuances may apply:
Where we are today
Tokenized securities are already being tested and used in real markets.
Franklin Templeton launched a tokenized money market fund that allows investors to hold fund shares on public blockchains like Stellar and Polygon.
JPMorgan has used its Kinexys platform to issue and trade tokenized short-term debt for institutional clients.
HSBC and UBS have both issued tokenized bonds to test faster settlement and more transparent recordkeeping.
Nasdaq’s latest move
In September 2025, Nasdaq, a leading U.S. stock exchange, announced plans to launch trading of tokenized securities as early as 2026, pending approval from the U.S. Securities and Exchange Commission.
If approved, investors will be able to buy and sell both traditional and tokenized versions of listed stocks and exchange-traded products on the same platform, the first initiative of its kind by a major exchange.
Nasdaq cited investor demand, improved digital infrastructure, and evolving regulation as the main drivers behind the move.
“The integration of tokenization and blockchain technology alongside traditional market infrastructure presents an extraordinary opportunity for the global financial system…The strongest markets, and the ones that endure, are those built on trust. If we can balance innovation with investor protection, we can build markets that are not just more efficient – but fundamentally better.”
– Tal Cohen, President, Nasdaq on LinkedIn