Apple stock is expected to go on the blockchain! The SEC will decide on AAPL blockchain trading next week, sparking a revolution in the US stock market.

The U.S. Securities and Exchange Commission (SEC) Investor Advisory Committee will meet on December 4 to discuss the on-chain trading of publicly traded stocks, gathering market structure architects from Nasdaq, BlackRock, and Citadel Securities. Nasdaq recently proposed to trade tokenized versions of listed stocks alongside traditional stocks on the same order book, such as Apple Inc. AAPL stock, arguing that blockchain settlement does not need to operate outside of the national market system.

Nasdaq Plan: Dual Track Trading with the Same CUSIP

(Source: LinkedIn)

Nasdaq's proposal most clearly demonstrates the operation model of “in-system” tokenization. The exchange proposed allowing listed stocks to be traded in either traditional digital form or token form, with both forms sharing the same CUSIP code, execution priority, and economic rights. This means that regardless of whether investors choose traditional stocks or tokenized stocks, they are receiving the same equity in the same company, with the same voting rights, dividend rights, and legal protections.

Tokens exist on the settlement layer. Issuers still register under the Securities Act, exchanges still operate under the Exchange Act, broker-dealers still route orders through integrated data streams, and the Depository Trust Company (DTC) still guarantees settlement. The blockchain replaces the back-end ledger, not the front-end rulebook. This design cleverly confines innovation to the technical level rather than the regulatory level, avoiding the complexity of rewriting the entire securities regulations.

The structure will keep tokenized equity within the regulatory scope of the NMS (National Market System), meaning that trading will still contribute to the national best bid and offer (NBBO), market makers will still face quoting obligations, and monitoring will still flag false trading and manipulative behavior. This compliance ensures that investor protection is not weakened by technological innovation.

Nasdaq warns that parallel trading venues outside of NMS will lead to fragmented liquidity, disrupt price discovery, and leave issuers unaware of the actual trading locations of their stocks. This is a direct criticism of offshore exchanges and unregistered platforms that offer stock tokens but are not regulated in the United States, leaving investors' rights unprotected.

The document explicitly rejects the exemption: tokenization is a settlement technology, not a new asset class, and therefore should not be subject to more lenient regulation. This position is crucial for maintaining the existing investor protection framework. If tokenized stocks are viewed as a new asset class and receive regulatory exemptions, it could create regulatory arbitrage opportunities that undermine market fairness.

Core Points of the Nasdaq Program

Dual Track Trading: Traditional stocks and tokenized stocks share the same CUSIP and are interchangeable.

Compliance Continuation: Issuance, trading, and settlement still comply with existing securities regulations.

Blockchain is only used for the backend: replacing the settlement ledger without changing the front-end rules.

Investor protection remains unchanged: Voting rights, dividend rights, and legal remedies are fully retained.

Key Differences Between Native Issuance and Wrapped Tokens

(Source: SEC)

The agenda for December 4th highlighted a difference often overlooked by cryptocurrency media: the native issuance of tokenized shares versus packaged structures. Native tokens refer to when the issuer places equity on the chain or instructs their transfer agent to maintain the blockchain register, thereby granting holders full voting rights, dividend entitlement, and liquidation priority. Under this structure, the tokenized version of Apple Inc. AAPL stock is legally equivalent to traditional stock.

The packaged tokens commonly found on offshore platforms only provide economic exposure: when prices rise, investors profit, but they cannot vote on shares nor initiate lawsuits in derivative actions. This structure is essentially a derivative rather than equity, with completely different risk characteristics. Nasdaq's documents warn the public by using European exchanges as an example, pointing out that the trading prices of tokens tracking Apple and Amazon stocks on these exchanges are severely disconnected from the prices of the underlying stocks, without the consent of the issuers, and holders have neither voting rights nor liquidation rights.

When these tokens collapsed, buyers found that what they owned were synthetic derivative products, not US stocks. This situation occurred in 2022 when the “Apple AAPL Stock Token” offered by certain offshore platforms plummeted in price due to a lack of liquidity, resulting in significant losses for investors who could not obtain the same legal protections as stock investors.

Exchanges believe that allowing such products to flood the market without registration would undermine investor protection and create a shadow stock market that regulators cannot see. This is also why the SEC must clearly distinguish between native tokenization and wrapped tokens. Only native tokenization can truly preserve investor rights, while wrapped tokens should be classified and regulated as derivatives.

The comments from the Securities Industry and Financial Markets Association (SIFMA) clearly state that investors must retain the same legal ownership and beneficial ownership in tokenized form; otherwise, the product will completely transform into something different. If the token only tracks the price, it will begin to resemble a security swap, thereby triggering different disclosure and margin rules.

Implementation Barriers: 24/7 Trading and NBBO Mechanism

At the high-friction end, listed stocks are actually traded around the clock 24 hours a day, which conflicts with the assumptions of Reg NMS regarding market hours and consolidated data. Regulators implement a 24/7 market in the cryptocurrency space, but applying this to the tokenization of Apple AAPL stock means redefining the best execution practices for New York's sleep while Tokyo is trading.

The NBBO (National Best Bid and Offer) mechanism is the core mechanism for protecting investors in the U.S. stock market, requiring all trading venues to execute orders at the national best price. But when the U.S. market is closed and the Asian market is trading tokenized U.S. stocks, how is the NBBO calculated? Should these trades be forced to wait until the U.S. market opens to execute, or should independent pricing be allowed to form? These questions have no answers under the current regulatory framework.

In terms of settlement, Nasdaq pointed out that DTC is building a blockchain infrastructure so that token transactions can be settled on-chain, while the exchange's matching engine and data sources remain unchanged. If the relevant infrastructure is in place as planned, real-time trading could potentially launch as early as the third quarter of next year. This timeline indicates that the technology is relatively mature, with the key being regulatory approval.

The meeting on December 4 will not approve Nasdaq's proposal, will not rewrite the definition of securities, and will not recognize offshore stock tokens that bypass issuer consent. The Investor Advisory Committee can submit findings and recommendations, but it does not set rules. This meeting can only provide a range of options for the committee to refer to when deciding whether tokenization of stocks falls under the national market system.