Nasdaq CEO Says Tokenization Could Free Billions in Trapped Capital

Highlights

Nasdaq CEO Adena Friedman says tokenizing assets and the movement of money could release tens of billions of dollars in capital currently tied up as collateral. The approach could make assets such as Treasurys, equities and money market funds easier to move through the financial system. Institutional interest is growing, while retail investors have long sought around-the-clock trading. Yet a fully continuous market would require financial institutions to manage risk and collateral in real time. Nasdaq is exploring digital agents to support this transition, and AI may be important to continuous operations. Friedman cautions that not every asset is liquid enough for 24/7 trading.

Sentiment Analysis

• The article presents tokenization as a potentially useful way to unlock capital held as collateral and improve the movement of financial assets. This creates a cautiously positive outlook on the technology’s potential benefits.


• It also describes growing institutional attention, the possibility of broader capital-market access for international companies, and the prospect of using AI tools to help manage continuous operations. These points suggest that adoption could expand, although they are presented as possibilities rather than guaranteed outcomes.


• The tone remains measured because the article identifies operational and liquidity constraints. Financial institutions would need to shift risk and collateral processes from scheduled windows to continuous, real-time management. In addition, some assets may not be liquid enough to support round-the-clock trading.


• Overall, the sentiment is mixed but leans positive: tokenization and AI are framed as promising tools, while the scale of implementation and suitability of particular assets remain important limitations.

Article Text

Nasdaq CEO Adena Friedman says tokenization could release tens of billions of dollars in capital that is currently tied up in assets used as collateral across the global financial system. The idea is to represent financial assets as digital tokens and enable them to move through systems built around blockchain technology. Friedman discussed the potential at the TOKEN2049 conference in Singapore in an interview with CNBC’s Joanna Ossinger, managing editor and head of APAC Digital News.

Assets that could be tokenized include Treasurys, equities and money market funds. Friedman argued that representing these instruments digitally, while also tokenizing the flow of money, could make collateral more fluid. In her view, making assets and payments move together could help capital circulate rather than remain unavailable while being held to support financial transactions.

Tokenization refers to representing assets such as stocks and bonds as digital tokens that can be transferred using blockchain technology. Friedman said institutional interest in the approach has increased over the past year. She pointed in part to the passage of the Genius Act in the U.S., which established a regulatory framework for stablecoins. The development, she said, has contributed to wider discussion about tokenized money and capital flows.

Demand for continuous trading is also influencing the conversation. Friedman said retail investors have long wanted to trade around the clock, and described the retail ecosystem as having been about 10 years ahead. However, moving financial markets to a fully 24/7 model would involve more than extending exchange opening hours. While Friedman characterized exchange infrastructure as the easiest part, financial institutions would also need to change how they operate.

Traditionally, institutions have relied on periods when markets are closed to update systems and manage risk. In a continuous market, processes such as risk assessment and collateral management would have to operate without those pauses. Friedman said that everything would need to happen in real time, all the time. That requirement would make reliable, continuous operational systems central to any move toward round-the-clock trading.

Artificial intelligence could help institutions manage this transition. Friedman said Nasdaq has launched a series of digital agents within its risk management platform. At first, these agents provide recommendations. Over time, banks could use them to take more direct action, she said. Friedman characterized AI as critical to supporting 24/7 markets, linking the technology to the need for ongoing monitoring and decision-making.

Interest in tokenization is not limited to U.S. institutions. Arjun Sethi, co-CEO of cryptocurrency exchange Kraken, told CNBC that companies outside the U.S. are exploring tokenization and access to American capital markets. He cited a company generating roughly $25 million in revenue that was considering ways to access capital markets, as well as larger international companies interested in tokenization and U.S. public listings. Sethi said tokenization could broaden capital-market access for companies around the world.

Friedman nevertheless stressed that continuous trading is not appropriate for every asset. Some assets may not be liquid enough to support a 24/7 environment, so the feasibility of round-the-clock activity will depend partly on the characteristics of each market. Greater connectivity across the global financial system could still make asset classes accessible to investors who previously had limited access. The article therefore presents tokenization as an opportunity accompanied by operational requirements and asset-specific limitations, rather than a universal solution.

Key Insights Table