Tokenized Collateral: What Nasdaq’s Own Data Says About the Savings

• Nasdaq chief Adena Friedman says tokenized collateral could release tens of billions of dollars locked inside the financial system.
• Nasdaq’s own survey shows most firms hit settlement problems daily and hold extra collateral to compensate.
• The IMF and the Financial Stability Board warn that faster collateral can bring faster liquidity stress and higher leverage.
• Nasdaq sells the infrastructure its chief executive is promoting, so the savings need independent measurement.

Nasdaq chair and chief executive Adena Friedman used an interview at TOKEN2049 in Singapore, held on October 7 and 8, to argue that moving Treasuries, equities, money market funds and cash onto interoperable digital rails could free tens of billions of dollars now tied up as collateral. She published no calculation for that figure, although research from Nasdaq, ISDA and DTCC makes it possible to check how much of the money is realistically within reach and what regulators expect to come with it.

Nasdaq’s model frees $4.8 billion of a $36.8 billion idle pile

Nasdaq had already put figures on the problem in February, when it published a survey of 203 market participants run with research firm ValueExchange. Banks, custodians, asset managers and clearing houses told it they compensate for unreliable delivery by posting assets early and holding more than they need.

70% of firms face settlement matching or delivery problems every day 35% post more than half of their collateral the night before 7% average excess collateral held as a safety buffer 52% expect to manage live tokenized collateral by end-2026

Source: Nasdaq and ValueExchange, 203 firms surveyed.

About a quarter of the collateral in use earns its owner nothing, according to the study. For a Tier 1 institution with more than $100 billion in assets, Nasdaq estimates $36.8 billion of excess or unpaid collateral and models that tokenization could mobilise $4.8 billion of it, adding roughly $346 million to annual interest income. That is 13% of the idle pool, modelled by a company that sells collateral technology, and no bank has yet reported earning it.

Why firms post collateral the night before, and how a token ends that

Today that collateral travels through custodians and settlement systems bound by cut-off times and business hours. A firm that fears a late delivery sends the assets the evening before and keeps a reserve on top. Once the same Treasury or fund share exists as a token on a ledger both sides share, the pledge and its release can execute in minutes at any hour, so that reserve can shrink.

DTCC, the main US clearing and settlement utility, put a number on the mechanism in a May paper written with consultancy Finadium, which projects that intraday repo, meaning cash borrowed against securities for hours instead of overnight, could halve intraday funding costs at large dealer banks. Money market funds have moved furthest because a fund share keeps paying yield while it is pledged, with JPMorgan announcing tokenized funds on its Kinexys platform in May and BlackRock adding European institutional share classes in August. The $311 billion quoted alongside BlackRock’s launch is the size of the underlying fund range, and the amount actually tokenized has not been disclosed.

One percent of ISDA’s $1.56 trillion already equals $15.6 billion

ISDA, the derivatives industry’s trade body, reported in April that the largest market participants had collected $1.56 trillion in margin against non-cleared derivatives at the end of 2025, a record and 9.3% above the previous year, with a further $423.5 billion of required initial margin sitting at major clearing houses. A 1% efficiency gain on the first figure would amount to about $15.6 billion, which shows that Friedman’s “tens of billions” needs only a small percentage improvement.

The arithmetic is purely illustrative, because most of this margin exists by regulation to absorb a counterparty default and tokenization leaves those requirements untouched. The Federal Reserve’s guidance points the same way, granting a tokenized security the capital treatment of its traditional equivalent only once it meets the legal tests for financial collateral.

Instant settlement removes the hours banks use to find cash

The delays that tokenization eliminates also serve a purpose, as the International Monetary Fund noted in May, since settlement lags give firms time to net trades against each other and arrange financing. With instant settlement a firm may have to keep liquid assets available around the clock, which hands back part of the capital saving, and automated collateral calls could force asset sales within minutes during a sell-off. The Financial Stability Board adds leverage to the list, because rehypothecation, the reuse of collateral received from one counterparty to secure a trade with another, becomes easier when assets move by code.

THE PROMISE Friedman: tens of billions in freed collateral Nasdaq study: $346 million a year for a Tier 1 firm DTCC: intraday funding costs cut in half THE BRAKE IMF: margin calls that hit within minutes FSB: more borrowing against the same assets Nasdaq survey: $2 million average project cost

The practical objection comes from Nasdaq’s own survey, in which firms report spending an average of $2 million on digital asset projects in 2025 and paying about 2 basis points, or 0.02%, for every chain they connect to, while the old systems keep running alongside the new ones. For smaller institutions those costs can absorb up to one-third of the expected revenue gain.

Nasdaq runs an SEC pilot and is putting $100 million into Kraken’s parent

Nasdaq has SEC approval for a pilot that settles trades in eligible Russell 1000 stocks and major ETFs in tokenized form, and it agreed in September to invest $100 million in Payward, the parent of crypto exchange Kraken, to build tokenized equity infrastructure. Both projects, along with its longer equity trading hours, depend on the real-time collateral management she presented in Singapore as a gain for the whole system. Friedman set limits of her own in the same interview, saying that exchanges can extend their hours far more easily than banks and clearing houses can adapt their risk management, and that some assets lack the liquidity to trade around the clock.

Three deadlines before mid-2027 will test the 52% forecast

Testing with real institutions has begun, and Vanguard and Wellington Management completed their first tokenized collateral trades in August, a test that used money market fund shares tokenized with Nasdaq technology on the Canton Network. The evidence that counts from here is the volume of collateral mobilised this way, any reported fall in the 7% buffer, and the number of clearing houses accepting tokenized assets during a week of market stress.

Q4 2026

DTCC’s Collateral AppChain, a shared ledger for collateral providers and custodians, is due to go live

End of December 2026

The survey’s forecast that 52% of firms will run live tokenized collateral falls due

Q2 2027

Expected launch of the tokenized equity infrastructure Nasdaq is building with Payward

Canton is a permissioned network built for institutions, which matters to crypto investors because banks can run tokenized collateral on private ledgers as readily as on Ethereum. Growth in this market therefore does not translate into proportional buying demand for ETH or any other token.

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