Nasdaq Tokenization Push Sparks Venue Risk Concerns

TD Securities warns that Nasdaq's push to tokenize capital markets could create a dual-market structure, where traditional U.S. exchanges operate alongside blockchain-based trading venues. This would introduce a distinct venue risk and potentially lead to price differences across platforms.

Nasdaq is pursuing three initiatives simultaneously: upgrading post-trade settlement processes, enabling companies to issue tokenized shares directly, and supporting trading on offshore blockchain-based platforms like Kraken's xStocks platform.

Kraken's xStocks has surpassed $25 billion in cumulative trading volume since November, with 150% growth. Coinbase has also moved into tokenized stocks as part of its push toward an 'everything exchange' model.