Nasdaq CEO Highlights Potential of Tokenization to Unlock Capital

Adena Friedman, CEO of Nasdaq, stated at the TOKEN2049 conference in Singapore that the tokenization of collateral assets could potentially free tens of billions of dollars currently tied up in the financial system. By converting Treasurys, equities, money market funds, and cash into digital tokens, Friedman argued that collateral could be transferred between institutions more efficiently than it is today. Although she did not specify how the estimate was calculated, it underscores the growing interest in tokenization within the financial sector.

Nasdaq is already taking steps to implement this vision. In March, the U.S. Securities and Exchange Commission approved a pilot program allowing Russell 1000 stocks and major index exchange-traded funds (ETFs) to settle as blockchain tokens on the same order book as traditional shares. This innovation allows tokenized shares to trade at the same price and under the same ticker as their ordinary counterparts, differing only in their settlement on a blockchain instead of through the traditional Depository Trust Company system.

Friedman also noted that while the transition to continuous trading poses challenges, including real-time risk and collateral management, Nasdaq is targeting a 23-hour trading session starting December 6. This initiative aims to extend trading hours beyond the current limits, although it will not yet achieve full 24/7 trading. The move is part of a broader trend, with companies outside the U.S. exploring tokenization as a means to access American capital markets.

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Source: KLEA News