Nasdaq is ramping up its digital capabilities, encouraged by the increasing institutional interest in digital assets. CEO Adena Friedman shared the firm’s plans in its third quarter results call, consolidated in a report by Markets Media.
Nasdaq recently submitted a filing with the US Securities and Exchange Commission (SEC) to support the trading of tokenised securities on its markets, a move that has stirred controversy among industry insiders. Markets Media quotes Friedman addressing the filing during the call: “We are tokenising the underlying equity, not a derivative of the equity. We are not changing the overall settlement cycles as we walk into this.”
She added that the idea is for investors to flag, on an order-by-order basis, whether they want the shares they are buying to be settled in tokenised form. “We are working collaboratively with the Depository Trust and Clearing Corporation (DTCC) to understand exactly how they would have two different settlement paths.”
Seize the opportunities
The interest in digital assets is creating opportunities across several of Nasdaq’s businesses, including trading, technology, and surveillance. “We are doing a lot to support infrastructure solutions as we think about the institutional adoption of digital assets,” Friedman was quoted as saying.
According to Markets Media, Nasdaq has developed trade surveillance technology that is specific to crypto assets. It is working on collateral management capabilities through its Calypso platform and has completed a proof on concept earlier this year that determined the usability of blockchain for managing collateral. Additionally, the firm offers investable index products for crypto assets and also lists crypto index exchange-traded funds (ETFs).
Friedman said, “As a market operator, we are encouraged by the fact that the SEC and Commodity Futures Trading Commission (CFTC) are cooperating to think about the regulatory landscape for crypto markets.”
