DeFi: Nasdaq and LSE planning to trade tokenized stocks and funds

Public and private equity will sit on blockchain based systems

Sep 26, 2025

GM Fintech Futurists,

Today we highlight the following:

DIGITAL ASSETS: Nasdaq and LSEG launch massive tokenization initiatives
CURATED UPDATES: Financial Institutions and Adoption; DeFi and Digital Assets; Blockchain Protocols; NFTs, DAOs and the Metaverse

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DIGITAL ASSETS: Tokenization on Nasdaq and LSEG

When the time is ripe, an idea is born in many places at once. And that idea may take shape in different ways, but come to market all at once.

Who Invented the Lightbulb? - Simple Lighting Blog

We are now seeing this with tokenized equity, following the earlier announcement from brokers and asset managers like Robinhood and BlackRock. Now, two of the largest equities exchanges in the world are taking on tokenization in pursuit of the same end-state — blockchain-based rails for regulated assets.

In the US, Nasdaq has formally asked the SEC to let it trade tokenized versions of equities and ETPs on its main market
In the UK, London Stock Exchange Group (LSEG) has switched on a blockchain-based infrastructure for private funds, completing its first live raise with Archax as nominee

On 8 September, Nasdaq filed a 19b-4 seeking permission to list and trade tokenized equity securities and ETPs in the national market system (NMS). The filing focuses on business continuity for clients, with the same approach as always for order handling, market data, and surveillance. Tokenized instruments will also carry the same legal rights as the regular shares, and similar processing for dividends, votes, and corporate actions.

NASDAQ Pushes Tokenization for 24/7 Markets! — Source

Settlement would still flow through the Depository Trust Company (DTC), the central US securities depository that handles record-keeping today.

In practical terms, that means the trading experience looks familiar to brokers and investors. The token primarily reflects how ownership is recorded and moved, not how prices are formed. Nasdaq emphasises that investors would still get the best available price across all markets — what US rules call the “National Best Bid and Offer,” i.e., the nationwide best buy and sell quotes. Timeline for the initiative depends on SEC approval and DTC readiness to support blockchain-based records at scale, expected to be in early 2026.

A week later, LSEG launched its Digital Markets Infrastructure (DMI) for private funds and completed a first live transaction — a primary fundraise for MembersCap’s reinsurance strategy, with Archax acting as nominee for an institutional investor. The system is built with Microsoft’s Azure cloud, and is designed to handle the full asset lifecycle across issuance, investor onboarding, ongoing servicing (like distributions and reporting), and secondary transfers.

Nasdaq is going straight into the public market, so it must work inside the U.S. national market system with all its protections. Nasdaq’s plan requires SEC approval and DTC support, so the tokenised record of ownership ties neatly into today’s settlement machinery. This is a difficult thing to pull off technically — effectively dealing with several ledgers.

LSEG is starting in private markets, where it can control more of the process and show measurable efficiency gains without disrupting public-market quoting and routing. By digitising cap tables and workflows on a permissioned blockchain, LSEG is targeting faster settlement, cleaner records, and simpler distribution to professional investors. LSEG positions this as market plumbing, not a crypto product. LSEG’s platform is already live for private funds and can add asset types over time as rules and demand allow.

So, what does this mean for the industry?

For issuers and fund managers
Digital workflows can compress timelines for raising capital and cut reconciliation headaches later (automated distributions, accurate investor registers, fewer manual errors). LSEG’s live deal is concrete proof in private markets. For public companies and product sponsors in the US, Nasdaq’s proposal offers an option to adopt tokenised rails without rewriting how their securities trade or how investors interact with them today.
For intermediaries
There should be demand for token-ready custody, transfer-agency services, and fund administration. Firms will need systems that can read and act on on-chain events (for example, when a smart contract triggers a distribution) while still meeting existing compliance and reporting obligations. In the UK, the government-run Digital Securities Sandbox, a supervised program by the Bank of England and the FCA, gives market infrastructures room to test blockchain-based settlement and record-keeping under modified rules. Outcomes there will inform a more permanent regime.
For investors and end users
The immediate benefits are faster, cleaner settlement, better auditability, and potentially easier access to certain private strategies (initially for professional investors). But two caveats matter: (1) always check legal equivalence, so that a token carries the same rights as a share in a different instrument, and (2) custody and key management introduce new operational risks. Many institutions will prefer regulated custodians (like Archax) over self-custody.

2025 is Critical for Scaling Tokenization - Markets Media — Source

To sum it all up, two of the world’s most important market venues are now treating tokenisation as a core initiative.

Nasdaq wants tokenised public-market instruments to trade under the same rulebook investors already use. If it can offer people tokenized AAPL stock, surely it can also offer them all sorts of other crypto assets as well. And LSEG is proving out the efficiency case in private funds, showing that there’s really no difference in asset class if it is digitally handled.

Both of these solutions are likely to utilise permissioned blockchains, rather than go fully public at this point, though we do not know the full details. In the past, Nasdaq experimented with DTC’s R3 Corda stack, and Canton Network has taken over the reins from Digital Asset. We are excited to learn more here, especially given that projects like this are many years in the making.

But in parallel, public chain tokenization is scaling in assets under management, such as BlackRock BUIDL on Ethereum or WisdomTree’s private credit on Ethereum/Stellar. We also see material progress in payments, as we have covered in our discussion of Stripe, Tether, and Circle stablecoin chains.

Back to the Future

In 2020, this was our framework for where the industry was going:

It has taken a bit longer than expected, but the playbook on convergence between DeFi and TradFi is coming together.

The large banks and financial markets began by (1) trying to tokenize data. It didn’t work or do much in the long run. Next, they moved onto (2) partial asset tokenization, and are now implementing blockchain tech at a much larger scale. Whether at the broker or exchange level, we are finally starting to see live and traded tokenized assets. Simultaneously, (5) the DeFi industry has scaled to $200B+ of assets, and (4) a large portion of financial software has been written on top of Ethereum, Solana, and now Hyperliquid. Even (3) has come to pass, as Bitcoin and ETH were packaged up into ETFs and Digital Asset Treasuries.

These connections will loop back and forth and get stronger over time, until we are surprised that any market remains off blockchains. Figure may be the Hyperliquid for home equity loans. Robinhood may be the home of tokenized stocks. Stripe could be that for payments. But more likely, the winners are yet to be discovered.

Analysis: Should banks fear Google's Fintech comeback?

We examine how Google’s re-entry into fintech with the launch of the Agent Payments Protocol (AP2) marks the beginning of a new phase of agentic commerce, where AI agents can safely make payments on behalf of users.

https://storage.googleapis.com/gweb-cloudblog-publish/original_images/AP2_Partners.jpg — Source

AP2 is backed by over 60 major partners and enables secure, cryptographically authorized transactions across various payment types, including cards, bank transfers, and stablecoins. Google is positioning itself as the core infrastructure provider for this emerging commerce layer, directly competing with Stripe, which is building its own Layer 1 blockchain (Tempo) for similar use cases. As Big Tech expands into programmable payments and financial networks, a duopoly is emerging between Google (enterprise-focused) and Stripe (startup-focused) in controlling agent-initiated financial flows.

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Contributors: Lex, Laurence, Matt, Farhad, Danny, Michiel, Michael

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