Nasdaq CEO sees billions unlocked by asset tokenization

The proposed shift centers on collateral management, a process currently hampered by fragmented custodians and settlement procedures. By tokenizing both the underlying financial instruments and the cash used for settlement, institutions could transform static assets into fluid capital. Friedman noted that while this transition remains an opportunity rather than an immediate reality, it represents a significant evolution for banks and funds that rely on pledged securities to support trades and loans.

Institutional interest in this infrastructure has gained momentum alongside regulatory progress, including the U.S. GENIUS Act. Nasdaq is positioning itself at the forefront of this shift through a $100 million investment in Payward, the parent company of Kraken. The partnership aims to deploy tokenized equity infrastructure by the second quarter of 2027, integrating market surveillance tools with blockchain-based settlement.

However, moving toward a 24/7 trading environment presents operational hurdles beyond mere technology. Friedman cautioned that continuous market access requires automated, real-time risk controls to replace the reconciliation periods traditionally used during market closures. While firms are increasingly deploying artificial intelligence to monitor exposure, the executive emphasized that liquidity remains a primary constraint; not every asset class possesses the depth required to sustain round-the-clock activity. As firms like Securitize begin testing tokenized versions of major U.S. equities on networks like Solana, the industry is closely watching whether these digital representations can maintain regulatory compliance while meeting the growing demand for continuous market access.