Nasdaq Urges SEC to Establish Clear Digital Asset Regulations Amid Growing Market Demand

In a significant development that underscores the financial industry's increasing involvement in digital assets, the Nasdaq Stock Market has formally urged the U.S. Securities and Exchange Commission (SEC) to create a clearer and more comprehensive regulatory framework for cryptocurrencies and other blockchain-based digital instruments.

In a detailed letter addressed to the SEC, Nasdaq officials argue that the lack of clarity surrounding how digital assets are classified and governed is hindering innovation and market integration. They advocate for a more modernised and adaptable set of rules that reflect the evolving realities of digital finance, while also leveraging existing securities laws.

The move is being seen as part of a growing trend among traditional financial institutions to engage more deeply with digital assets, even as regulatory uncertainty continues to cloud the sector’s long-term trajectory.

Nasdaq's Call to Action: A Push for Regulatory Reform

Nasdaq, one of the world's leading securities exchanges, is no stranger to technological innovation. Over the past decade, it has taken steps to integrate blockchain and other emerging technologies into its infrastructure. Now, it seeks to extend that vision by encouraging policymakers to provide a transparent, balanced, and consistent approach to regulating digital assets.

In its letter to the SEC, Nasdaq highlights the increasing convergence between traditional financial markets and digital asset ecosystems. The exchange argues that many digital assets — such as tokenised securities, stablecoins, and certain cryptocurrencies — could fit within existing regulatory frameworks if proper modifications and guidance are issued.

"To support market growth while ensuring investor protection and market integrity, the Commission must establish a clear, predictable, and adaptable regulatory regime for digital assets," the letter states.

The Need for Classification and Clarity

A central point in Nasdaq's argument is the classification of digital assets. The exchange notes that the current ambiguity surrounding whether a digital token is a security, a commodity, or something else altogether creates a fragmented and often contradictory legal environment.

This confusion discourages responsible innovation, deters institutional participation, and could ultimately push crypto entrepreneurs to operate outside of U.S. jurisdiction. Nasdaq proposes that the SEC collaborate with other agencies — including the Commodity Futures Trading Commission (CFTC) and the U.S. Treasury — to define and agree upon clear taxonomies for digital assets.

Such classifications would enable exchanges, custodians, and service providers to build compliant systems, while also providing investors with greater transparency and confidence.

Aligning with Global Trends

Nasdaq’s letter also points to the actions of international regulators as examples the U.S. could learn from. Jurisdictions such as the European Union, Singapore, and the United Arab Emirates have made considerable progress in codifying digital asset regulations, thereby attracting innovation and investment.

The European Union’s Markets in Crypto-Assets (MiCA) framework, for instance, lays out comprehensive rules for issuers of crypto-assets, service providers, and stablecoin operators. Nasdaq suggests that the U.S. risks falling behind its global peers if it does not act swiftly to create a regulatory environment that matches the pace of technological change.

“Other leading economies have recognised the need to update their regulatory frameworks in response to digital innovation. The United States must do the same or risk ceding leadership in financial innovation,” the letter warns.

Implications for Exchanges and Market Infrastructure

The call for regulatory clarity is not just about compliance—it’s about competitiveness. Nasdaq argues that with the right oversight, digital assets could be integrated into existing market structures, including exchanges and clearing systems.

The organisation envisions a future in which regulated digital securities trade alongside traditional equities, offering new opportunities for investors and capital formation. However, this will require clear guidelines on how such assets are issued, traded, settled, and reported.

Nasdaq is particularly focused on the role of digital asset custodianship and trading platforms. Currently, many digital exchanges operate outside the SEC’s jurisdiction, leading to concerns over investor protection, fraud, and market manipulation. Bringing these platforms under a unified regulatory umbrella, Nasdaq argues, would improve transparency and public trust.

Balancing Innovation and Investor Protection

In its correspondence with the SEC, Nasdaq emphasises that it is not calling for deregulation. Rather, it is advocating for a framework that balances innovation with the need to protect investors and preserve market integrity.

The letter proposes a series of core principles that should guide the development of digital asset regulations, including:

• Clear definitions of digital asset categories

• Requirements for disclosures and investor education

• Rules for anti-fraud and market manipulation prevention

• Guidelines for digital asset custody and risk management

• A pathway for existing exchanges and market participants to offer digital asset services under current licenses

Such a framework, Nasdaq argues, would not only support responsible innovation but also help regulatory bodies enforce the rules more effectively.

SEC’s Position and Ongoing Regulatory Debate

The SEC, under Chairman Gary Gensler, has maintained that most cryptocurrencies fall under its jurisdiction as securities. Gensler has repeatedly called on crypto firms to "come in and register," stating that the rules are already clear. However, many in the industry argue that the path to registration remains opaque and often impractical.

The tension between regulators and the crypto industry has played out in high-profile legal cases, including ongoing litigation involving Ripple (XRP), Coinbase, and other major firms. These disputes underscore the pressing need for legislative or regulatory clarity to avoid prolonged uncertainty and potential economic stagnation in the sector.

Congress has also weighed in, with bipartisan efforts underway to draft digital asset legislation that could offer clarity on agency jurisdictions and asset classifications. Nasdaq’s letter is likely to add momentum to those discussions.

The Future of Finance in a Digital Age

As the lines between digital and traditional finance continue to blur, Nasdaq's plea to the SEC reflects a broader recognition that the future of capital markets is increasingly digital.

From tokenised stocks and real-world asset-backed tokens to central bank digital currencies and decentralised finance protocols, the scope of innovation is vast and rapidly expanding. Nasdaq’s leadership believes that regulation should evolve in parallel with technology, not lag behind it.

"Regulatory clarity will unlock the full potential of digital finance while maintaining the trust and stability that are hallmarks of the U.S. capital markets," the letter concludes.

Final Thoughts

Nasdaq’s appeal is more than just a request—it is a reflection of a shifting landscape in global finance. With trillions of dollars flowing into digital assets, and new financial architectures being built on blockchain technology, the call for modern regulation has never been louder or more critical.

As policymakers grapple with the implications of a digital financial future, Nasdaq’s recommendations may serve as a blueprint for how traditional institutions and innovative technologies can coexist, collaborate, and ultimately reshape the financial system.

🔥 NEW: Nasdaq Calls for Clearer Digital Asset Rules in Letter to SEC

In a new letter, Nasdaq urges the SEC to create a regulatory framework that properly classifies digital assets, arguing they can fit into existing markets with the right oversight. pic.twitter.com/2tBhordAHK

— Cointelegraph (@Cointelegraph) April 25, 2025

Whether the SEC responds with concrete measures in the coming months remains to be seen. But what is clear is that the financial industry is no longer content to wait in the wings. The time for regulatory reform, it seems, has arrived.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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