Nasdaq unveiled a new partnership to drive the modernization of Europe’s capital markets infrastructure through tokenized trading and settlement.
This strategic collaboration aims to bring together Nasdaq’s European trading venues with Seturion, Boerse Stuttgart Group’s pan-European settlement platform for tokenized assets. By creating a single unified platform for settlement of tokenized assets across Europe, the partnership is a step toward transforming an ecosystem traditionally characterized by fragmentation, inefficiency and high costs.
The Nasdaq Newsroom sat down with Roland Chai, EVP and President of European Market Services and Head of Digital Assets at Nasdaq, to learn more about the new partnership:
Can you explain today’s announcement with Seturion?
Roland Chai: It’s a partnership to develop new digital post-trade infrastructure – a settlement platform for digital assets. The idea is to begin to transform the post-trade landscape in Europe with the accelerated use of tokenization, to solve problems caused by the existing patchwork of systems and legal frameworks which can inhibit efficient cross-border market activity. This will develop under the DLT pilot regime, set out by EU regulators.
What problem will this partnership be solving?
Roland Chai: Europe’s capital market settlement infrastructure and securities processing infrastructure suffer from inefficiency and fragmentation, which results in complexity, slow processes and high costs for market participants.
We see this partnership as creating a central digitized platform for post-trade to really drive a new paradigm in terms of efficiencies for Europe. We are helping to reduce costs for investors, improve access to products, and deliver efficiencies in asset life cycles like corporate actions.
How exactly does digital ledger technology solve this problem?
Roland Chai: Putting securities onto a distributed ledger means there is significant potential for transparency, direct control, and frictionless mobility. This allows you to automate and standardize some of those inefficient workflows that right now happen through multiple parties and via antiquated processes, that in some cases are over email. That automates workflow, reducing inefficiency, and that in turn releases capital to support economic growth. Multiple studies show that these processes and settlement inefficiencies cost the industry huge amounts of money every year.
How does the new Seturion partnership relate to Nasdaq’s vision for the future of market infrastructure?
Roland Chai: We believe in modernizing markets with industrial-grade infrastructure that’s resilient and has high integrity. So we believe this partnership with Boerse Stuttgart Group’s Seturion platform enables us to drive our vision for DLT-enabled, always-on markets.
We are embedding tokenization into the heart of our capital markets infrastructure in a resilient and high-integrity fashion.
Where will this partnership focus first?
Roland Chai: We are beginning this partnership with structured products – Nasdaq and Boerse Stuttgart are leading structured products venues, but the process of issuing, and settling those products can be especially cumbersome and inefficient.
We see Seturion as being ideal for tokenizing those structured products, providing a more efficient way of being able to issue and trade them across multiple markets, and then settle them on one standard platform.
Why is Seturion the right partner for Nasdaq on this? And why is Nasdaq the right partner for them?
Roland Chai: Just as Nasdaq has been at the forefront of modernizing market architecture, we see excellent partners in Boerse Stuttgart Group in their ability to be agile, move forward, and foresee of the future development of capital markets. They share our vision for simplifying and harmonizing capital markets infrastructure to improve Europe’s capital markets ecosystem.
Nasdaq is a trusted market operator and is a leader in market modernization. We bring significant operational and regulatory experience and see strong opportunities for this partnership to accelerate our vision of Always-on, tech-enabled markets.
What are the next steps?
Roland Chai: This is the start of an exciting partnership. We’re starting with structured products as a first step, but as the platform attracts more participants, we foresee the creation of a whole new ecosystem that can be truly transformational for the way Europe’s capital markets operate and support the companies and investors they are there to serve.
