Adena Friedman, CEO of Nasdaq, sees blockchain reshaping the traditional financial system in three main ways: by overhauling post-trade infrastructure, freeing up trapped capital through better collateral mobility, and enabling faster, smoother payments.
“There is so much capital trapped, whether in clearinghouses or clearing brokers,” Friedman said in a discussion with Ripple President Monica Long at the Swell conference in New York on Tuesday. “If we do it right, we can turn this into an opportunity to provide more capital to the system.” »
Post-trade processes – the systems that finalize and settle securities transactions – remain deeply fragmented and often rely on decades-old infrastructure. Friedman noted that while some complexity is intentional, often for reasons such as risk management or tracking allocations, much of the friction is unnecessary. She believes blockchain could help unify and streamline these workflows, reducing inefficiencies that tie up capital and slow down financial activity.
The second major opportunity lies in improving how financial institutions move and manage collateral – assets pledged in trading and lending transactions – to mitigate risk. According to Friedman, digital assets could facilitate the rapid transfer of collateral across platforms and borders. “What we really like about the idea of digital assets is the ability to move that collateral,” she said. “We can create a collateral mobility effort and… free up a lot of capital.” »
Payments is the third area for change. Although Nasdaq does not operate in the payments business, Friedman stressed that smoother and more efficient payment systems are essential to allowing investors to participate frictionlessly in global markets.
She described the current payments infrastructure as a bottleneck, slowing the flow of capital. If these systems could be improved or rebuilt using blockchain, she said, it could unlock significant amounts of capital currently stuck in outdated processes. This, in turn, would help investors move their funds more easily across platforms, borders and asset classes, making the financial system more open and efficient.
Nasdaq has already started laying the groundwork. The exchange operator recently filed an application with the United States Securities and Exchange Commission to support the trading of tokenized securities. Under the proposed framework, an investor could flag a trade for token settlement, and the post-trade system – including the DTCC clearinghouse – would route it accordingly, enabling delivery into a digital wallet. This approach, Friedman said, maintains the basic structure of existing securities while providing investors with greater flexibility.
She was quick to emphasize that the goal is not to replace or fragment U.S. stock markets, which she describes as “extremely resilient” and “highly liquid,” but to improve them by integrating technologies that reduce friction and improve investor choice.
Tokenized markets could start in post-trade functions, she said, but could eventually reshape how securities are issued and traded. “Let’s keep all these beautiful things [about the U.S. markets]then let’s place technology where we can actually reduce friction.
