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 mobility and enabling faster, more seamless payments.
“There’s so much capital that’s trapped, whether it’s 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 deliver more capital into the system.”
Post-trade processes—the systems that terminate and settle security 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 allocation tracking, much of the friction is unnecessary. He believes blockchain can help unify and streamline workflows, cutting out 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 reduce risk. According to Friedman, digital assets can make it easier to move collateral quickly across platforms and borders. “What we really love about the idea of digital assets is that that collateral can be moved,” he said. “We can create a mobility effort and … free a lot of capital.”
Payments is the third area ripe for innovation. While Nasdaq did not operate in the payments sector, Friedman stressed that smoother, more efficient payment systems are key to allowing investors to participate in global markets without friction.
He described today’s payments infrastructure as a bottleneck, slowing the flow of capital. If those systems can be improved or rebuilt using blockchain, he said, it could unlock significant amounts of capital currently tied up in outdated processes. That, in turn, will help investors move funds more easily across platforms, borders and asset classes – making the financial system open and efficient.
Nasdaq has begun laying the groundwork. The exchange operator recently filed with the US Securities and Exchange Commission to support the trading of tokenized securities. Under the proposed framework, an investor can flag a trade for tokenized settlement, and the post-trade system—including the Clearinghouse DTCC—routes it accordingly, allowing delivery to a digital wallet. This approach, Friedman said, preserves the basic structure of existing securities while offering investors more flexibility.
He was quick to point out that the goal is not to replace or fragment US equity markets, which he described as “highly resilient” and “highly liquid,” but to enhance them by deploying technology that reduces friction and improves investor choice.
Tokenized markets may begin with post-trade functions, he said, but may eventually reshape how securities are issued and traded. “Let’s keep all the good things (about the US markets), and then put the technology where we can reduce the friction.”
