Tal Cohen, president of Nasdaq, highlighted that the U.S. Securities and Exchange Commission’s (SEC) new stance on cryptocurrency regulation is providing market players with the flexibility to innovate using blockchain technology and tokenized assets. Speaking at Consensus in Miami on Wednesday, Cohen noted a shift from regulatory uncertainty to an environment where building and experimentation are possible.
Cohen described how four years ago, what was once considered a gray area became a no-fly zone for innovation. Today, it allows market operators to gain scale and test ideas without significant regulatory pushback.
He also pointed out that financial markets are gravitating towards ‘always on’ trading systems. These systems enable nearly continuous operation, facilitating faster transactions of money, securities, and collateral compared to traditional methods. Nasdaq, which supplies trading technology to over 130 global markets, is investing in blockchain infrastructure, tokenization, and artificial intelligence as part of this transition.
Cohen emphasized two trends: ‘always on’ market infrastructure and the convergence between conventional financial systems and digital asset platforms. He noted that a significant challenge remains achieving interoperability between these systems, as companies prefer not to maintain separate infrastructures for traditional securities and tokenized assets.
“Whether you’re in the existing world or the digital one, I’m integrating everything so you can benefit from both,” Cohen remarked.
He also acknowledged a more cooperative approach from regulators. “The SEC is now proactive rather than just open-minded,” he stated.
Cohen suggested that tokenization could simplify asset movement, financing, and trading, while providing issuers with enhanced insights into shareholder activities. He explained that it essentially mobilizes assets.
In addition, Nasdaq is exploring AI systems to mimic trading activity within a digital version of its matching engine. This technology aims to assist the exchange in testing market stress scenarios and enhancing software reliability as markets extend their trading hours.