Nasdaq CEO Adena Friedman sees blockchain reshaping the traditional financial system in three key ways: by overhauling post-trade infrastructure, unlocking trapped capital through better collateral mobility, and enabling faster, more seamless payments.
“There’s so much capital tied up, whether it’s in clearinghouses or clearing brokers,” Friedman said Tuesday during a call with Ripple President Monica Long at the Swell conference in New York. “If we do it right, we can actually turn this into an opportunity to deliver more capital to the system.”
Post-trade processes – the systems that complete and settle securities transactions – remain deeply fragmented and often rely on decades-old infrastructure. Friedman noted that while some of the complexity is intentional, often for reasons such as risk management or allocation tracking, much of the friction is unnecessary. She believes blockchain can help unify and streamline these workflows, reducing the inefficiencies that tie up capital and slow financial activity.
The second major opportunity lies in improving how financial institutions move and manage collateral – the assets pledged in trade and credit transactions to mitigate risk. According to Friedman, digital assets could make it easier to quickly transport 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 an additional mobility effort and … free up a lot of capital.”
Payments are the third area ripe for change. Although Nasdaq is not in the payments industry, Friedman emphasized that smoother, more efficient payment systems are critical to allowing investors to participate in global markets without friction.
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be improved or rebuilt using blockchain, she said, it could free up significant amounts of capital currently tied up in outdated processes. That, in turn, would help investors move their money 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 US Securities and Exchange Commission to support trading of tokenized securities. Under the proposed framework, an investor could flag a trade for tokenized settlement, and the post-trade system – including clearinghouse DTCC – would route it accordingly, enabling delivery into a digital wallet. This approach, Friedman said, maintains the core structure of existing securities while offering investors more flexibility.
She was quick to point out that the goal is not to replace or fragment U.S. stock markets, which she described as “extremely resilient” and “highly liquid,” but to strengthen them by integrating technology that reduces friction and improves investor choice.
Tokenized markets may start in post-trade functions, she said, but could ultimately reshape the way securities are issued and traded. “Let’s keep all those great things [about the U.S. markets]and then let’s deploy the technology where we can actually reduce friction.”