Financial Prophecy: Nasdaq plans to digitally represent shares of companies like Apple through tokenization

Nasdaq, one of the world's leading stock exchanges, has proposed a groundbreaking change that could reshape the financial landscape. The exchange aims to make tokenized versions of stocks tradable on regulated exchanges, marking one of the largest practical tests of blockchain technology in the American stock market.

The project, if approved, will see tokenized assets traded under the same rules for execution and documentation as their traditional counterparts. Clear labeling as a "tokenized asset" will ensure that all market participants can process orders correctly.

Nasdaq's ambition is to give issuers control over the tokenization of their securities, a departure from the current model where tokenized stocks have mainly been issued by third parties. This change could pave the way for a more streamlined and efficient market, potentially making traditional intermediaries obsolete due to nearly real-time settlements with blockchain technology.

The proposed change also aims to adjust fundamental definitions, including what legally constitutes a security. This adjustment could open up a new world of opportunities, promising higher liquidity, easier fractional ownership, and potential 24/7 trading.

However, the move has not been without controversy. AI company OpenAI recently warned against trading tokenized OpenAI stocks on platforms like Robinhood, as they were not authorized by the company and did not represent real company shares.

The U.S. policy under new SEC chair Paul Atkins shows growing openness to crypto innovations. More established financial giants, including BlackRock, Franklin Templeton, and KKR, have started projects to tokenize fund shares, indicating a broader acceptance of blockchain technology in the financial industry.

Nasdaq's application for regulatory approval is currently under review by the U.S. Securities and Exchange Commission. The board and majority shareholder of the publisher, Börsenmedien AG, have direct and indirect positions in the financial instruments mentioned in the publication or related derivatives.

As investors bet on Bitcoin itself as the mother of all blockchains and cryptocurrencies, the potential benefits of blockchain technology, such as increased transparency and efficiency, are becoming increasingly apparent. Bitcoin (ISIN: CRYPT0000BTC) is mentioned in the context of the benefits of blockchain technology.

In conclusion, Nasdaq's proposed change could revolutionize the way stocks are traded, potentially making the financial system more efficient and accessible. However, it is crucial to ensure that all parties involved, including investors and regulatory bodies, fully understand the implications and potential risks associated with tokenized assets.