Tokenizing assets used as collateral could free tens of billions of dollars tied up across the global financial system, Nasdaq CEO Adena Friedman said at the TOKEN2049 conference in Singapore. She said digitising assets such as Treasurys, equities and money market funds, together with the movement of money, could make collateral more readily usable. The estimate points to a potential source of liquidity without requiring institutions to sell the underlying assets.
Collateral is the focus of the estimate
Friedman’s argument centres on capital held against financial obligations. When assets serve as collateral, they support transactions and risk management but may not be readily available for other uses. Making those assets easier to transfer could allow the same capital to move through markets more efficiently.
The assets she identified include U.S. Treasurys, equities and money market funds. Her estimate was in the tens of billions of dollars, but the source material does not give a more precise total or a timetable for any release. The opportunity is therefore a projection about how market plumbing could change, not a measured amount already returned to circulation.
Tokenisation would digitise assets and money flows
Tokenisation represents financial assets, including stocks and bonds, as digital tokens that can be transferred using blockchain technology. Friedman’s proposal extends beyond issuing tokens for individual holdings: she also emphasised tokenising the flow of money, so that payments and collateral can move in a more connected way.
That combination matters because an asset’s usefulness as collateral depends partly on how easily it can be delivered and managed. If both the asset and the associated money movement can operate digitally, institutions could face fewer barriers to reallocating collateral. The material describes the potential mechanism, but does not specify a platform, launch date or market-wide implementation plan.
Institutional interest meets a regulatory shift
Friedman said institutional interest in tokenisation had grown over the previous year. She pointed in part to passage of the Genius Act in the United States, which established a regulatory framework for stablecoins. The law concerns stablecoins, while the broader tokenisation opportunity discussed by Friedman includes conventional financial assets and money flows.
Interest is also coming from outside established financial institutions. Arjun Sethi, co-CEO of cryptocurrency exchange Kraken, told CNBC that companies beyond the United States were exploring tokenisation and access to American capital markets. He cited one company generating roughly $25 million in revenue and said larger international businesses were also considering tokenisation and U.S. public listings.
A 24-hour market would require more than new technology
Friedman linked tokenisation to retail investors’ longstanding interest in trading around the clock. She said the retail ecosystem had been about 10 years ahead in that regard, but warned that moving financial markets to continuous operation would be a major undertaking. Exchange infrastructure, she said, is the easiest part of the transition.
The harder work would involve processes that institutions currently handle during market closures, including system updates and risk and collateral management. In a 24/7 environment, those functions would need to run continuously. Nasdaq has launched digital agents within its risk management platform that initially make recommendations; Friedman said banks could eventually use such agents to take more direct action, and described AI as critical to continuous markets.
Not every asset is suited to constant trading
Friedman cautioned that round-the-clock trading will not fit every asset. Some are not liquid enough to support continuous trading, she said, making market design and the characteristics of each asset important constraints. Tokenisation could improve transferability, but it does not by itself ensure that buyers and sellers are always available.
Even with that limitation, stronger connections across global markets could broaden access to asset classes that some investors have found difficult to reach. The possible benefit is wider participation as well as more efficient collateral use, while the practical outcome depends on institutions building continuous risk controls and markets suited to each asset.
Takeaway: Friedman’s tens-of-billions estimate rests on making collateral and money flows more transferable, but real-time markets would require continuous risk management and would not suit every asset.
References
- cnbc.com — “Nasdaq CEO: Tokenization could unleash billions in trapped capital”
- The Tech Buzz — “Nasdaq CEO: Tokenization Could Free Tens of Billions in Capital”
- investinglive.com — “Nasdaq CEO says tokenization could free tens of billions in trapped collateral”
- qz.com — “Nasdaq CEO Adena Friedman on tokenization and trapped capital”
- Seeking Alpha — “Nasdaq CEO: Tokenization could unlock tens of billions in trapped capital”
