Nasdaq CEO says tokenization could unlock tens of billions of dollars in capital, and AI will drive growth.

Nasdaq CEO Adena Friedman said tokenizing collateral assets such as US Treasuries, equities and money market funds, together with cash flows, could significantly improve collateral liquidity and unlock hundreds of billions of dollars of capital currently locked up in the global financial system. She made the comments during the TOKEN2049 meeting in Singapore, according to Quartz.

The headline theme points to tokenization unlocking tens of billions of dollars and AI supporting future growth.

Tokenization generally refers to representing ownership or cash-flow rights in an asset as a digital token on a blockchain or similar distributed ledger. In that context, assets such as Treasuries, equities and money market funds are not just instruments held by investors, but also collateral that financial institutions use to support lending, repo activity, derivatives trading and settlement. If such collateral can be recorded, transferred and monitored more seamlessly, markets may become more capital efficient.

Institutions and retail demand are driving the shift

Friedman said institutional interest in tokenization has risen noticeably over the past year. She also pointed to retail investors, whose demand for round-the-clock trading is pushing traditional financial markets toward a 24/7 model.

For institutions, the appeal is often operational: cleaner records, faster movement of collateral, less reconciliation between counterparties and more continuous visibility into risk exposure. For retail participants, the appeal may be simpler: access, transparency and the ability to trade at times that do not depend on a single exchange schedule. When both groups expect markets to function continuously, traditional venues face pressure to rethink trading hours, liquidity provision and investor protection.

Infrastructure, risk and collateral must run in real time

To make continuous markets work, Friedman said exchanges would need upgraded infrastructure. Risk management and collateral management would also need to operate around the clock and in real time. She said AI will play an important role in that process.

Continuous trading raises practical questions. If prices move at any hour, margin calls, collateral substitutions, counterparty risk checks and market surveillance cannot wait for the next business day. Infrastructure must handle higher data volumes, faster settlement cycles and more frequent interactions among exchanges, custodians, clearing firms and participants. AI can be used in such settings for pattern detection, anomaly monitoring, document processing and resource allocation, but it also introduces model-risk and operational-risk considerations that market institutions must manage.

Not every asset can trade all day

Friedman added that not all assets have sufficient liquidity to support round-the-clock trading. The remarks show tokenization and AI are becoming core issues for future market infrastructure rather than experimental finance topics.

Liquidity depends on the presence of willing buyers and sellers, reliable pricing and enough participants to absorb orders without excessive slippage. Highly traded assets may be more suitable for continuous markets, while thinly traded collateral or complex instruments may still need trading windows, inventory controls or intermediary support. In that sense, tokenization is not only about putting assets on a ledger; it is about building the market plumbing that allows assets to move safely, efficiently and at scale.

Risk Warning

This article is only an information summary based on public reports and does not constitute investment advice. Crypto assets, tokenized assets, and related technologies can be highly volatile and may involve regulatory, liquidity, and operational risks. Market trends or expert statements do not guarantee future results. Readers should independently verify facts, assess their own risk tolerance, and consult qualified professionals before making investment decisions. Please remain rational, avoid speculative behavior, and never invest money you cannot afford to lose.