Tokenization poised to unlock tens of billions in collateral as 24/7 trading gains momentum

Key points

• Nasdaq CEO Adena Friedman indicated that tokenizing financial instruments and money flows could make collateral more liquid, potentially freeing tens of billions of dollars currently trapped in the global financial system.
• Institutional interest in tokenization has increased over the past year, partly due to the U.S. Genius Act, which established a regulatory framework for stablecoins, while retail investors have long sought 24/7 trading capabilities.
• Transitioning to 24/7 markets requires continuous risk and collateral management, a challenge Nasdaq is addressing with AI-driven digital agents in its risk management platform that initially provide recommendations before potentially taking direct action.
• Kraken co-CEO Arjun Sethi reported that companies outside the U.S., including those with revenues around $25 million, are exploring tokenization to gain access to American capital markets and public listings.
• Friedman warned that 24/7 trading is not suitable for all assets, as some lack the necessary liquidity, though greater global connectivity could open access to previously unreachable asset classes.

Background

This development follows broader trends in financial technology where AI and blockchain are increasingly integrated into traditional finance. Recent corporate actions, such as Nvidia's record $235 billion buyback program, highlight the growing confidence in AI-driven cash flows, while other tech sectors continue to navigate complex regulatory and patent landscapes. The push for tokenization aligns with a broader shift toward digital asset management, as seen in the funding of defense tech firms like Tekever, which leverages AI for autonomous systems, reflecting the broader industry's move toward real-time, automated financial and operational infrastructure.

How outlets are covering it

CNBC emphasizes the structural and regulatory benefits of tokenization, focusing on how it can unlock trapped capital and the role of AI in enabling 24/7 trading infrastructure. In contrast, Milk Road highlights the speculative and investment potential of tokenization, noting that while only about $300 billion in assets are currently tokenized against a $600 trillion total, the sector could grow significantly. Milk Road points out that stablecoins dominate current tokenized assets, but traditional finance is warming up to the concept, with financial advisers seeking new investment themes beyond AI. The two sources differ in focus: CNBC highlights institutional and regulatory drivers, while Milk Road emphasizes market growth potential and investment strategies, noting that early movers in tokenization-related stocks have seen significant gains.

Why it matters

Tokenization could fundamentally reshape global financial infrastructure by increasing the liquidity and accessibility of capital, potentially freeing tens of billions of dollars currently locked in collateral. The move toward 24/7 trading, enabled by AI, could enhance market efficiency and open new investment opportunities for both institutional and retail investors. Additionally, it could provide international companies with greater access to U.S. capital markets, fostering global financial integration. However, the transition requires significant changes to existing financial systems, including continuous risk management, which poses both opportunities and challenges for the industry.

What to watch

The next steps include the continued development and integration of AI-driven risk management systems to support 24/7 trading, as well as the expansion of tokenized assets beyond stablecoins to include equities, bonds, and other financial instruments. Institutional investors are expected to increase their participation in tokenization, particularly in the latter part of 2026, as financial advisers seek new investment opportunities. Additionally, international companies may continue to explore tokenization as a means to access U.S. capital markets, while regulators and financial institutions work to address the challenges of implementing continuous trading systems.