Nasdaq CEO Says Tokenization Could Free Tens of Billions in Capital

Nasdaq CEO Adena Friedman said tokenization could free tens of billions of dollars tied up as collateral, potentially helping financial markets operate around the clock.

Friedman made the comments Thursday at the TOKEN2049 conference in Singapore. She said tokenizing assets such as Treasurys, equities and money market funds, along with the movement of money, could make collateral easier to transfer and use across the global financial system.

“If you tokenize all those instruments along with the flow of money, then the collateral becomes very fluid,” Friedman said.

Tokenization represents financial assets as digital tokens that can be transferred using blockchain technology. Friedman said institutional interest in the process has grown over the past year, including after the United States passed the Genius Act, which established a regulatory framework for stablecoins.

“If we can tokenize money, then we can tokenize the flow of capital,” Friedman said.

The shift toward markets operating 24 hours a day, seven days a week would require financial institutions to manage risk and collateral continuously. Financial firms have traditionally used periods when markets are closed to update systems and handle risk-management tasks.

“Everything has to be real time all the time,” Friedman said.

Artificial intelligence could help support that transition. Nasdaq has launched digital agents within its risk-management platform that initially provide recommendations. Banks could eventually use similar agents to take more direct action, Friedman said.

“AI is critical for 24/7,” she said.

Kraken co-CEO Arjun Sethi said companies outside the United States are exploring tokenization and seeking greater access to American capital markets. He pointed to a company generating roughly $25 million in revenue that was considering ways to access capital markets, along with larger international companies interested in tokenization and U.S. public listings.

Sethi said tokenization could expand access to capital markets for companies around the world. Friedman cautioned that round-the-clock trading may not suit every asset because some assets are not liquid enough to support continuous trading.