Nasdaq CEO warns against tokenized stock derivatives that obscure market trading

Nasdaq's Adena Friedman raises concerns over fragmented markets from tokenized stock derivatives blurring price discovery. Nasdaq is prioritizing tokenization that brings securities onto blockchain while maintaining direct ownership of the underlying assets, CEO Adena Friedman said, speaking in a recent interview with CNBC’s ‘Squawk Box.’ Friedman identified three approaches to tokenization, including issuing and trading tokenized shares through established market infrastructure, moving share trading outside that system under regulatory exemptions, and issuing stock-backed derivatives. Nasdaq is focused on the first model as it develops an end-to-end approach to tokenized equities, she said. Friedman likewise raised concerns that stock-backed tokens and trading outside established market systems could weaken price discovery, fragment liquidity and limit companies’ visibility into trading in their shares.

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