Nasdaq CEO says tokenization could unlock billions in collateral

Nasdaq CEO Adena Friedman stated that blockchain tokenization could release tens of billions of dollars currently tied up as collateral in global financial markets. During an interview at TOKEN2049 in Singapore, Friedman suggested that converting assets such as Treasury securities, stocks, and money market funds into digital tokens could improve capital efficiency and enable round-the-clock trading.

Nasdaq research, conducted with ValueExchange, highlights existing inefficiencies in the current system. A survey of 203 market participants revealed that 70% of firms encounter settlement matching or delivery problems daily. To compensate for these unreliable deliveries, many institutions hold excess collateral as a safety buffer. For a Tier 1 institution with over $100 billion in assets, Nasdaq estimates that tokenization could mobilize approximately $4.8 billion of an estimated $36.8 billion in excess or unpaid collateral.

While tokenization offers potential interest income gains, regulatory bodies such as the IMF and the Financial Stability Board have cautioned that faster collateral movement could lead to increased liquidity stress and higher leverage. Friedman noted that continuous trading would require robust real-time risk controls and sufficient liquidity across all assets.