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      Nasdaq CEO Advocates for Tokenization to Unlock Trapped Capital

      Adena Friedman, CEO of Nasdaq, has highlighted the potential of tokenization to release billions of dollars currently immobilized within traditional financial systems. Speaking at Ripple's Swell conference in November 2025, she emphasized that a significant amount of capital is stuck in clearinghouses and brokerage systems, where it remains idle during the settlement process of trades. This situation arises as funds are held as collateral until transactions are finalized, preventing them from being utilized elsewhere.

      To address this issue, Friedman proposed that tokenized securities could enhance liquidity and facilitate faster payments. By allowing for the movement of collateral more efficiently, tokenization could reduce the amount of capital tied up in limbo during the settlement phase. Nasdaq has taken steps to advance this vision, filing a proposal with the U.S. Securities and Exchange Commission (SEC) in September 2025 to enable trading and tokenized settlement of equities and exchange-traded funds (ETFs) on its primary markets.

      In March 2026, Nasdaq introduced a framework for equity token design, which prioritizes issuer choice and aims to ensure that tokenized shares adhere to the same regulatory standards as traditional securities. This initiative is part of Nasdaq's broader strategy to innovate within the securities markets without creating a new cryptocurrency, focusing instead on improving existing frameworks. The proposal maintains the involvement of the Depository Trust & Clearing Corporation (DTCC) for settlement, thereby minimizing risks for institutions accustomed to current systems.

      The success of this initiative could significantly benefit institutions that currently post collateral and await settlement, allowing them to deploy capital more effectively. However, the proposal is still subject to SEC approval, and the timeline for a final decision remains uncertain. Investors are advised to monitor the SEC's response to Nasdaq's filing and the industry's adaptation to the new tokenization framework as developments unfold.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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