Can stock tokens replace NASDAQ? A practical analysis and trend outlook for 2026

In 2026, U.S. capital markets are going through a landmark moment: stocks are genuinely starting to “move onto the blockchain.” In March, the U.S. Securities and Exchange Commission (SEC) formally approved Nasdaq’s proposal to amend rules for tokenized securities trading, allowing eligible stocks and ETFs to be traded and settled in tokenized form within the traditional trading framework. Shortly after, NYSE Texas, a subsidiary of the New York Stock Exchange Group, also filed and took effect similar rule amendments. Meanwhile, Intercontinental Exchange, the parent company of NYSE, announced it is developing a new tokenized securities platform, with targets including 24-hour trading, near-instant settlement, and stablecoin funding access.

A chain of actions like this has triggered a key question at the heart of both the crypto industry and traditional finance: Can stock tokens actually replace traditional securities exchanges such as Nasdaq?

Nasdaq’s Counterattack — When Traditional Exchanges Embrace Blockchain Proactively

The most convincing answer often comes from within the question itself. On March 18, 2026, the SEC officially approved Nasdaq’s proposed rule amendment for securities tokenization trading (SR-NASDAQ-2025-072), which Nasdaq had filed on September 2025. This approval is not about creating a separate, regulator-free “on-chain casino,” but about embedding blockchain technology into the existing national market system.

The design details from Nasdaq send a crucial signal — tokenization is not about replacement, but about upgrading. Under the rules approved by the SEC, tokenized securities and traditional securities will trade within the Nasdaq trading venue under “same venue, same rights, same prices.” Tokenized securities must be fully interchangeable with their corresponding traditional securities, sharing the same CUSIP number and trading code. Holders will have equal shareholder rights, including dividend rights, voting rights, and rights to the distribution of residual assets in a liquidation. Both categories of assets will be recorded on the same order book, with identical execution priority.

This design addresses the most central issue in the replacement argument: stock tokens are not intended to create a parallel “shadow market” outside Nasdaq, but to achieve a generational upgrade of infrastructure within Nasdaq itself. From a broader perspective, Nasdaq and the actions by the NYSE show that traditional exchanges no longer regard blockchain as an external challenge; instead, they are beginning to actively absorb it. Many previously believed that crypto exchanges would “disrupt” traditional exchanges. Now, the more likely path is that traditional exchanges evolve through technological upgrades.

The Truth About Scale — From $1.5 Billion to $5 Trillion

Another pillar supporting the replacement argument is market size. As of May 2026, after excluding stablecoins, the on-chain tokenized real-world assets (RWA) footprint has risen to roughly $31 billion to $34 billion, up significantly from about $5.4 billion to $6 billion at the start of 2025. Of that, the market cap of tokenized public stocks listed on-chain is about $150 million, up more than 5 times from the start of 2025.

If you look only at the $150 million figure, the size of tokenized stocks is roughly comparable to that of a mid-sized listed company’s market cap, and is almost negligible compared with Nasdaq’s annual trading volume measured in trillions of dollars. But growth rate is the key. In Q1 2026, the total on-chain value of tokenized stocks first surpassed $100 million, and within twelve months it grew nearly 29 times.

More imaginative projections come from industry leaders. On June 10, 2026, Carlos Domingo, CEO of Securitize, publicly said that tokenized stocks could drive the RWA market from around $30 billion to $5 trillion. He noted that the total global stock and ETF market is roughly $150 trillion, and even if only 2% to 3% goes on-chain, it would approach the $5 trillion scale. Domingo believes that tokenized stocks—not private credit or government bond products—will be the key driver of this growth.

$5 trillion is a number large enough to make traditional exchanges pay close attention, but it still represents only about 3% of the total global stock market capitalization. The goal of stock tokens has never been to “eliminate” Nasdaq. Rather, it is to provide a more efficient, lower-cost, and more programmable “second track” for capital flows.

Who Is Leading the Tokenized Stock Market?

The tokenized stock market currently shows a highly concentrated competitive landscape. Based on Token Terminal data for May 2026, the market cap of tokenized stocks reached $1.5 billion, covering 2,649 tokenized equity assets, 10 blockchain networks, and 11 issuing institutions. Ondo Finance holds a 63.1% share with a market capitalization of $963.3 million. Second place is xStocks with $402.7 million, accounting for 26.4%. Together, the two control 89.5% of the market share.

Ondo Finance’s tokenized stock product, Ondo Global Markets, currently supports more than 250 tokenized assets, covering categories such as artificial intelligence, energy, biotechnology, defense, and Bitcoin ETFs. Its TVL grew from approximately $534 million in 2024 to over $3 billion in 2026. Its partner network includes more than 150 institutions, such as BlackRock, Fidelity, Goldman Sachs, and J.P. Morgan.

However, this concentrated pattern itself also hints that the track is still far from mature. In contrast to Ondo, early entrants such as Backed Finance’s multiple stock token products have a total TVL that has not yet exceeded $10 million, and daily trading volume is even below $4,000. From historical lessons, in 2021 Binance launched tokenized stock products tied to U.S. stocks including Tesla, Coinbase, and Apple, but within weeks it was warned by financial regulators in the U.K. and Germany, and less than three months later it announced delisting of all related products. From 2020 to 2022, FTX also provided tokenized trading services for U.S. stocks; after FTX collapsed in 2022, the business came to an abrupt end. Afterwards, rumors further questioned whether its stock tokens were fully backed by the corresponding stocks.

The participation landscape in the tokenized stock market has not yet formed a stable equilibrium.

Dual-Track Regulation — Moving from Fragmentation Toward Unity

Any discussion of “replacement” ultimately cannot bypass the wall of regulation. 2026 is a critical turning point in the global regulatory framework for crypto assets as it moves from fragmentation toward unity.

In the United States, after the SEC approved Nasdaq’s tokenization pilot in March, DTCC (the core depository and settlement infrastructure for U.S. securities markets) announced in May that more than 50 traditional finance and digital finance institutions have joined its tokenization working group. It plans to launch tokenized securities trading in a limited production environment in July 2026 and officially roll out the service in October. The tokenization services offered by DTC cover assets including Russell 1000 constituent stocks, major index ETFs, and U.S. Treasuries, and the size of assets it currently holds in custody exceeds $114 trillion.

In Europe, MiCA (the Markets in Crypto-Assets Regulation) will enter full implementation on July 2026. After the transition period ends, only institutions holding MiCA licenses may conduct the relevant business in the European Union market. At the same time, the EU is considering expanding its Distributed Ledger Technology (DLT) pilot program to provide test scenarios for the tokenization of more types of financial assets.

Gradual regulatory unification is a prerequisite for stock tokens to truly go mainstream. Without a clear legal framework, “replacement” has no basis to even be discussed.

Conclusion

Returning to the core question at the beginning of the article: can stock tokens replace Nasdaq?

Based on existing data and the evolution of the institutional framework, the more likely answer is “integration” rather than “replacement.” Nasdaq’s proactive embrace of tokenization shows that traditional exchanges are trying to internalize blockchain’s efficiency advantages into their own competitiveness, rather than waiting to be disrupted. DTC’s planned launch of tokenized securities services in October 2026 is, in essence, embedding blockchain infrastructure into the core back-end systems of traditional finance. Meanwhile, DTCC’s currently custodied asset base of $114 trillion is more than 3,000 times the current approximately $34 billion tokenized RWA market size—this magnitude gap means that “replacement” remains a distant narrative for the foreseeable future.

But this does not mean stock tokens have no significance. On the contrary, their real value lies in opening a new parallel track for global capital flows alongside traditional Nasdaq. On this track, assets can be traded 24/7, settlement is close to instant, assets are programmable, and they can be deeply combined with DeFi ecosystems. As Carlos Domingo pointed out, traditional markets will not disappear; we will witness a new parallel market rising strongly, operating on blockchain rails with efficiency beyond imagination.

For Gate users, this trend means a large structural arbitrage space and investment opportunity is taking shape between traditional stocks and crypto assets. Whether by participating in tokenized stock trading through compliant channels or by tracking leading projects rising in the RWA sector, staying continuously updated on the progress of stock tokenization will be one of the most important investment lessons in the second half of 2026 and over the next three years.