Nasdaq CEO sees tokenization freeing up billions in global collateral

Tokenizing financial assets and the movement of money could release tens of billions of dollars in capital locked up as collateral throughout the global financial system, said Nasdaq CEO Adena Friedman in an interview with CNBC at TOKEN2049 in Singapore.

Friedman said tokenized Treasurys, equities and money market funds could make collateral more fluid by improving its liquidity.

Nasdaq’s growing involvement in tokenization is focused on the systems that allow traditional financial assets to operate on blockchain networks.

The company is working with Payward, Kraken’s parent company and the infrastructure provider behind xStocks, on an equities transformation gateway. The goal is to connect regulated, permissioned financial infrastructure with permissionless blockchain networks where tokenized equities can circulate.

Friedman said institutional interest in tokenization has accelerated over the past year, with the passage of the GENIUS Act, which established a regulatory framework for stablecoins, contributing to the trend.

She said the ability to tokenize money could also allow financial institutions to tokenize capital flows. The development is bringing institutional finance closer to retail investors’ demand for 24-hour markets, which Friedman said has put the retail ecosystem about 10 years ahead.

Establishing fully round-the-clock financial markets would require more than upgrading trading infrastructure.

Friedman said exchange infrastructure is the easiest element to address, while institutions would need to ensure that risk controls, collateral management and system updates can function without the scheduled downtime traditionally associated with market closures. All these processes would need to operate in real time.

Nasdaq is using artificial intelligence to help prepare for that shift. The firm has introduced digital agents in its risk management platform that currently provide recommendations and could eventually execute actions more directly. Friedman said AI would be essential to supporting 24/7 trading.