Nasdaq tokenization plans could split trading into two markets — TD Securities

Tokenized stocks could shift trading beyond US exchanges, raising the risk of price gaps and fragmented markets, according to TD Securities.

Nasdaq’s push to bring tokenization into capital markets could lead to a dual-market structure in which traditional US exchanges operate alongside blockchain-based trading venues, according to TD Securities — a shift that could split trading activity and lead to price differences across platforms.

In a recent note, Reid Noch, vice president of US equity market structure at TD Securities, pointed to plans by Nasdaq and the New York Stock Exchange to introduce tokenization into alternative trading systems (ATS), a type of venue that matches buyers and sellers outside traditional exchanges.

While both exchanges are exploring tokenization, Noch said Nasdaq is pursuing three parallel initiatives: upgrading how trades are settled after execution, enabling companies to issue tokenized shares and supporting trading on offshore platforms such as Kraken.

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