TD Securities: Nasdaq's tokenization efforts risk market fragmentation

Nasdaq's adoption of stock tokens and tokenization technology could lead to a dual market structure in the U.S., fragmenting trading and widening price differences for the same assets across platforms, TD Securities has warned. According to a Cointelegraph report, the Canadian investment bank noted that Nasdaq plans to introduce tokenization to its Alternative Trading System (ATS), which connects buyers and sellers outside of traditional exchanges. The report states Nasdaq is pursuing three main objectives: improving post-trade settlement and clearing, helping companies issue their own stock tokens, and facilitating the trading of these tokens on overseas platforms like Kraken. TD Securities explained that this approach could create separate markets for the same underlying assets, introducing new risks such as reduced trading volume and greater price discrepancies between platforms.