Nasdaq Files to Tokenize Every Stock

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast; Simon Taylor of Fintech Brainfood and Pet Berisha of Sporting Crypto

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We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

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Simon’s Market Readout 💬 

Nasdaq just filed with the SEC to tokenize every stock and ETF on its exchange starting 2026.

Genuinely. The $18.9 trillion race just got real.

This isn't a crypto-native experiment or derivative product launch. Nasdaq wants to give users a choice at execution: trade the same AAPL and NVDA with identical shareholder rights, voting power, and dividends - just settled on blockchain rails instead of the traditional system. Your broker simply flags "tokenized settlement", and the DTC handles everything behind the scenes.

There will be three strategic implications:

1. The killer app for onchain finance will be tokenized stocks, not DeFi speculation. We're watching the once-in-a-generation overhaul of capital markets happen in real time. If this catches on, expect it to explode like ETFs did - what started as a niche innovation became the dominant structure because it solved real operational problems while feeling familiar to institutions.

2. Consumer protection becomes the defining regulatory battleground. The big question isn't technical feasibility - it's whether retail investors can hold these stocks as tokens directly. How will disclosures work when your Tesla shares live in a MetaMask wallet? Will derivatives like Robinhood and SPVs like Ondo face tighter regulation when competing against native tokenized securities? Your local securities regulator will have an interesting next few months figuring this out.

3. The 24/7 global settlement revolution starts with equities, not payments. What this unlocks changes a lot: instant settlement eliminates T+2 delays, programmable ownership enables automated corporate actions, and global trading means your stablecoin-holding diaspora in South Africa can buy $TSLA directly without currency conversion delays.

The competitive landscape is already heating up. Today's tokenized stocks market sits at $28 billion with 60% on Ethereum. BCG projects $18.9 trillion onchain by 2033. Coinbase is launching within months. Ondo Finance has 100+ tokenized stocks live. Galaxy became the first NASDAQ company to tokenize its own equity.

But Nasdaq's approach differs fundamentally from existing players like Robinhood. Rather than creating derivative products or wrapped tokens, they're tokenizing actual equity with full rights intact. Same order book, same execution priority, same everything - just blockchain settlement infrastructure.

So the question becomes: 

Will institutional order flow actually choose tokenized settlement when given the option? 

The answer depends on execution. The DTC must build bulletproof infrastructure by 2026. Custody integrations need to work seamlessly. Market makers must provide competitive spreads across both settlement methods.

If they succeed, this validates the "invisible infrastructure" thesis - making blockchain feel like better traditional finance rather than forcing crypto adoption. But success requires clearing real switching thresholds on cost, speed, and operational reliability compared to systems that have processed quadrillions in transactions over decades.

For institutional decision-makers, this represents a defining moment. The infrastructure is being built by the institutions you already trust. The regulatory framework is clarified through formal SEC filings. The timeline is aggressive but achievable.

Stories You Can't Miss 📰

🚀 Hyperliquid's $5.5B USDH Governance Vote Challenges Circle's Dominance

(https://decrypt.co/338398/hyperliquid-validators-usdh-ticker-first-governance-test)

The largest Decentralized Exchange Hyperliquid is preparing to migrate $5.5 billion from Circle's USDC to a native stablecoin through a competitive auction process.

This could be one of the largest potential challenges to USDC's dominance in high-velocity trading venues.

And it has triggered a bidding war playing out in public.

Key Points:

• The stakes: Hyperliquid currently holds $5.5 billion in USDC (~7.5% of total USDC supply) while generating $106 million in perpetual futures revenue during August with 70% DeFi market share

• Competing proposals: Paxos, Frax and Agora (plus others) are competing to issue USDH, with bids differing materially. Paxos offers 95% of interest earnings toward HYPE token buybacks; Frax proposes 100% Treasury yield flowing to users backed by BlackRock's BUIDL; Agora emphasizes neutrality with MoonPay payment distribution

• Revenue impact: At 3-5% yields, this migration could cost Circle $80-140 million annually in reserve income from their share of the $165-275 million gross interest generated

• Migration mechanics: September 14th governance vote will determine which issuer wins the USDH contract, with implementation potentially following within months

The Tokenized Take:

This represents the next evolution of stablecoin competition - major venues launching native alternatives to capture economics currently flowing to Circle and Tether. The revenue math is also fascinating: whoever wins USDH captures the "float" from Hyperliquid's dollar rails, while Circle loses material income from one of DeFi's highest-velocity venues.

Here’s a great analysis by ELI5 DeFi. Each approach balances different priorities - compliance (Paxos), yield optimization (Frax) and ecosystem alignment (Agora).

The regulatory complexity runs deeper than headlines suggest. The GENIUS Act prohibits paying interest directly to stablecoin holders. This has forced creative structures like token buybacks and “assistance fund” contributions. But when users receive cash-like benefits tied to reserve yields, regulators may scrutinize in the future whether these mechanisms violate the spirit of the law.

Strategically, this shifts DeFi from "neutral, network-wide dollars" toward venue-native currencies with built-in value capture. This could also risk increased fragmentation across the ecosystem if other exchanges and l2s follow the same trajectory. USDC retains advantages in payments and institutional use cases, but trading venues increasingly prefer house-brand stables that recycle yield into competitive advantages.

For institutional observers, this tests whether decentralized governance can successfully challenge established financial institutions. Circle must defend through deeper integrations and treasury-grade compliance, while USDH's winner must thread the regulatory needle - capturing economics without paying prohibited "interest" while maintaining the transparency that institutions require.

To go deeper on the USDH war, check out this Stabledash report.

🚀 Stripe & Paradigm Launch Tempo: A Payments-First L1 for Stablecoins

Disclosure: Tokenized’s own writer Simon Taylor is joining Tempo. Views below reflect our independent editorial framework; we include his on-the-ground context where relevant.

Stripe and Paradigm's official unveiling of Tempo confirms what we have been predicting for quite some time - that major payment processors would eventually build purpose-built blockchain infrastructure rather than retrofit existing chains.

(https://www.coindesk.com/business/2025/09/06/stripe-ceo-patrick-collison-explains-why-businesses-are-turning-to-stablecoins)

Key Points:

• Tempo targets 100,000+ transactions per second with sub-second finality, designed specifically for Stripe's global payment scale rather than general blockchain use cases

• The blockchain eliminates native tokens entirely - users pay fees directly with stablecoins, reducing volatility barriers

• CEO Patrick Collison described it as "behind-the-scenes" infrastructure like SWIFT or ACH - consumers won't interact with Tempo directly but will benefit from its efficiency

• Enterprise distribution advantage: Design partners include Anthropic, OpenAI, Shopify, DoorDash, Revolut, Nubank, Deutsche Bank, Standard Chartered, and more…

The Tokenized Take:

This represents a fundamental strategic choice in stablecoin infrastructure: Circle's Arc offers vertical integration convenience (one issuer, seamless experience) while Tempo provides multi-issuer neutrality (routing optionality, competitive dynamics).

For enterprise treasuries, this isn't zero-sum - large payers want optionality across issuers and venues rather than vendor lock-in. I've been tracking Stripe's blockchain evolution since their early crypto scepticism. What's fascinating is how Collison's team recognized that payments infrastructure must own the rails in a tokenized world. The Bridge acquisition wasn't just about stablecoin capabilities - it was about understanding that abstraction beats education. Rather than asking enterprises to learn crypto, make blockchain feel like better traditional payments.

That said, the practical challenges are significant. Regulatory compliance depends on which issuer rails you route through, requiring sophisticated KYC/AML controls across multiple stablecoin providers. Issuer depth becomes critical - which stablecoins, which jurisdictions, what redemption SLAs? The elegant concept of stablecoin-neutral AMMs also creates operational complexity around pricing, liquidity management and risk assessment across multiple issuers.

Tempo's distribution advantage through Stripe's existing merchant relationships and Bridge's infrastructure provides a credible path to enterprise adoption. But success hinges on delivering superior cost/finality SLAs, dispute resolution tooling, and auditability compared to existing rails. Banks and payment networks won't stand still - Tempo must clear real switching thresholds on cost, reach, and reconciliation capabilities.

For institutional decision-makers, this validates the "invisible infrastructure" approach I have long advocated - making stablecoins feel like better traditional payments rather than forcing crypto adoption. The question becomes whether issuer neutrality proves more compelling than integrated convenience as enterprises scale their stablecoin operations.

Learn more in our latest podcast episode

🏛️ Nasdaq Wants to Tokenize Every Stock You Already Trade

(https://www.coindesk.com/policy/2025/09/08/nasdaq-seeks-nod-from-u-s-sec-to-tokenize-stocks)

Nasdaq just filed with the SEC to let you trade tokenized versions of AAPL, TSLA and every other stock on their exchange. The aim is not to create new markets, but to make the $50 trillion US equity market run on blockchain rails.

Key Points:

• No new tickers needed: Tokenized shares trade on the same order book with identical security identifiers (ISIN, CUSIP, etc.) and shareholder rights as regular shares. Your broker just flags "tokenized settlement" at execution

• DTC handles the heavy lifting: The Depository Trust Corporation does all the blockchain work behind the scenes, so trading feels exactly the same while settlement happens on distributed ledger

• Timeline is aggressive: Nasdaq thinks token-settled trades could start by late 2026, assuming the SEC plays ball and DTC builds the infrastructure

• Regulatory momentum building: This filing came right after the SEC signalled it might allow crypto trading on national exchanges

The Tokenized Take:

The key point is that this is an infrastructure play, not some innovation theatre. Nasdaq's Chuck Mack made it clear they want to prevent "a fractured market of different versions of the same assets". They've watched DeFi fragment liquidity across dozens of protocols and learned the lesson. Keep price discovery centralized, make settlement programmable.

The adoption friction will disappear to a good degree. Your portfolio manager doesn't need to learn anything new. Same stock, same rights, same execution. But now corporate actions can be programmable and reconciliation happens in real-time instead of T+2. That's the institutional holy grail we wish for: all the benefits, none of the operational headaches.

Robinhood paved the regulatory path. Just a few months ago, we saw their letter to the SEC laid out exactly this approach - treat tokenized securities as equivalent to traditional ones, let DTC handle settlement. Nasdaq is taking that framework and scaling it to exchange level before anyone else can move.

So, the question becomes: Will institutional order flow actually choose tokenized settlement when given the option? The infrastructure has to work flawlessly. And DTC needs to be ready by 2026. If clearing and settlement systems aren't prepared, this becomes another pilot program collecting dust. But if it works? Every major exchange will need to find ways to catch up.

🏛️ BaFin-Supervised 21X Goes Live With Smart-Contract Settlement

(https://www.finextra.com/pressarticle/106944/tokenized-cash-and-securities-exchange-21x-opens-for-business)

Germany's 21X exchange has opened under BaFin supervision within the EU DLT Pilot Regime, becoming the “first” platform to offer smart-contract order matching and atomic settlement between tokenized securities and regulated stablecoins.

Key Points:

• Technical implementation: Operates on Polygon PoS with smart-contract order books and permissioned access requiring KYC'd membership, delivering real-time settlement with sub-second finality

• Atomic settlement model: Trades settle instantly using regulated e-money token (EMT) stablecoins through 21X's partnership with Dutch EMI Quantoz, eliminating traditional clearing delays

• Early traction signals: 30+ participant agreements signed with 100+ instruments in pipeline; ABN AMRO completed a successful pre-launch on-chain trade using 21X's order-book contracts

• Institutional backing: Launch supporters include Chainlink, Circle, Polygon and SBI Digital Markets, providing credibility across the tokenization stack

The Tokenized Take:

Let's be precise about that "first" claim: SIX Digital Exchange has operated a regulated DLT exchange since 2021. And Switzerland's BX Digital won the first FINMA DLT trading license in March 2025.

21X's genuine innovation is narrower but significant - the first public-chain DLT trading system under EU supervision offering smart-contract matching with atomic settlement against regulated EMTs.

Why this matters to institutions: 21X now provides a board friendly place to run real pilots. It’s supervised in the EU, so you can test faster settlement and wallet-based workflows with real money and real controls. Also, the atomic settlement model eliminates counterparty risk - because cash and assets swap at the same time, which can cut failed trades and post-trade reconciliations for eligible bonds/funds. Plus, it’s a 24/7 money rails - you can move cash outside bank hours, which essentially improves funding flexibility for pilots.

Now, the critical test ahead is operational execution and liquidity. While 30+ participants and 100+ instruments display the team’s solid early traction, institutional adoption depends on market-maker commitments, custody integrations and broker OMS/EMS connectivity. The next two quarters will reveal whether 21X can achieve the spreads and depth that institutional order flow requires - because in capital markets, liquidity ultimately beats technology.

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• MegaETH launches native USDm stablecoin with Ethena to subsidize sequencer fees (Read more here)

• Strategic partnership to advance cross-border payments and RWA token infrastructure between Hong Kong and Singapore (Read more here)

• First government-issued stablecoin creates new competitive dynamics against private alternatives (Read more here)

• Market acceleration driven by stablecoin dominance with projections reaching $30 trillion by 2034 (Read more here)

• Record $165 billion stablecoin supply cements Ethereum's RWA market leadership (Read more here)

• Emerging market adoption drives retail payment volumes to all-time highs (Read more here)

• Stablecoins become default currency for daily transactions from groceries to salaries in Venezuela (Read more here)

🤑 Funding and M&A

• Cyprus-based venue operates under MiFID II framework for crypto derivatives (Read more here)

• 97-year-old community bank retooled for fintech and crypto services, partners with Stripe and Visa (read more here)

• SPAC dedicated to ENA token buybacks as USDe (read more here)

💼 Government & Policy

• Former National Assembly chief advocates Binance and Coinbase listings for won-pegged tokens (Read more here)

• Tether CEO confirms continued investment in Bitcoin, gold, and land despite market rumors (Read more here)

Tweet of the Week 🐤 

From Inversion

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