More than a Token GestureLast month, Nasdaq filed a proposed rule change with the SEC to allow the trading of tokenised equity securities and exchange-traded products on its market.Proponents of stock tokenisation suggest it has the potential to turbocharge US equities trading by enabling round-the-clock trading and instant settlement.Join buy side heads of FX in London at FMLS25.It has been suggested that Nasdaq has taken an intelligent approach to tokenisation by linking traditional order books with on-chain settlement and getting legacy institutions on board rather than trying to steal their lunch money.Not everyone is convinced, of course, given the potential for equity tokenisation to highlight deficiencies in investor protection, cross-border regulations and custody systems. Should retail involvement be permitted too hastily, it may lead to a chaotic market environment for securities.The counterargument is that tokenisation in this form does not convert shares into anonymous bearer instruments akin to stablecoins but rather that they remain on-chain, permissioned securities that adhere to the same eligibility, accreditation and geographic regulations.Read more: Tokenised Stocks Are Here, but Do They Really Bring Added Value over CFDs?This is not the first time an exchange has embarked on a tokenisation project, although Nasdaq will hope to be more successful than the Australian Securities Exchange. ASX launched a blockchain tokenisation trial as part of plans to replace its legacy clearing and settlement system that had been in the works since 2017.🚨 JUST IN: 🇺🇸 Nasdaq has filed with the SEC to tokenize stocks.Nasdaq CEO Adena Friedman says tokenized stocks & ETFs are the future as global markets move onchain.THIS IS MASSIVE! 🔥 pic.twitter.com/B4kdz43t8I— Real World Asset Watchlist (@RWAwatchlist_) September 10, 2025However, the proposed system ran into a number of issues around governance, and the ASX eventually scrapped the project, with critics claiming that it underestimated the technical and operational complexities of integrating blockchain technology into critical market infrastructure.Nasdaq’s proposal is particularly interesting in view of Robinhood’s foray into tokenised US stocks through blockchain-tracked contracts for privately held companies – a move that has not gone down well with the companies to which these tokens are tied.Robinhood CEO Vladimir Tenev has stated that the broker plans to make thousands of private companies available to retail investors. But this option is currently only available on a small number of stocks for investors outside the US due to concerns over how the tokens would be classified under US securities registration and resale laws.The concept of giving retail investors access to investments that are currently the preserve of institutional investors sounds worthy, but there are significant regulatory and risk factors to overcome before they enter the mainstream.Interest-ing Developments in Global Derivatives MarketsThe headline figure from the Bank for International Settlements’ triennial central bank survey of FX and OTC interest rate derivatives markets is invariably the volume of FX traded every day ($9.6 trillion as of April 2025, up 28% from 2022 and equivalent to around half of China’s GDP).But the more interesting finding from the 13th and latest edition of the survey – which has been conducted every three years since 1986 – is that daily trading of OTC interest rate derivatives increased more than twice as fast as FX trading to reach $7.9 trillion.Compare that to the results of the 2022 survey, which found that turnover of OTC interest rate derivatives in April 2022 was lower than in 2019.Daily global FX volume is nearing $10 trillion. 👀👀👀 pic.twitter.com/ToICcwVoD9— Bespoke (@bespokeinvest) October 1, 2025That decline was largely a reflection of reduced turnover from forward rate agreements following the transition from the use of Libor as a reference rate at the end of the previous year. However, some markets have still experienced extraordinary growth. For example, average daily turnover in Australian OTC interest rate derivatives markets increased by 123% over the survey period, reflecting an increase in turnover of interest rate swaps.The Japanese market expanded even further between April 2022 and April 2025, driven by an explosion of interest in forward rate agreements. Turnover in Japanese yen derivatives increased by almost 700%, and Japan is now the seventh-largest OTC interest rate derivatives market in the world.There was also strong growth in euro, sterling and Swiss franc-denominated contracts.One trader suggests that although binary options and interest rate derivatives operate differently in terms of structure and purpose, those trading the latter can learn from the former.His argument is that although institutional traders are looking to manage long-term exposures through interest rate derivatives – in contrast to binary options traders, who seek to exploit shorter-term movements in FX and bond markets – they are both focused on the implications of central bank decisions.The thinking here is that short-term speculation in binary options is often a reflection of the same forces that drive institutional players in global derivative markets.If the Cap Fits, Will Traders Wear It?The latest example of divided opinion on stablecoins at the top of the UK banking system is the Bank of England’s plan to limit stablecoin ownership in the UK to ‘mitigate financial stability risks stemming from large and rapid outflows’.The proposed limits are between £10,000 and £20,000 for individuals and £10 million for businesses.Policymakers have stressed that the limit may only be imposed until a comprehensive regulatory framework has been established. But it’s not like the Bank of England hasn’t had time to formulate a proper stablecoin policy – its discussion paper on the regulatory regime for systemic payment systems using stablecoins and related service providers was published almost exactly two years ago.The proposal has been greeted with predictable scorn from the crypto industry, with stablecoin advocates arguing that they pose no more risk to financial stability than traditional electronic money issued on more fragile electronic databases.One industry participant suggested that the purpose of the limit was to control how much money moved outside the traditional banking system and described the policy as one that would be more commonly found in developing countries.Another agreed with the view that the risk profile of stablecoins is akin to that of conventional electronic money and that the systemic risk lies in the structure and oversight of the reserve assets that support the stablecoin, along with their distribution within the financial system.The proposed limits were also described as a mechanism for protecting commercial banks that don’t have the intellectual capital, resources or technology to manage the interaction between traditional finance and blockchain finance.Protectionism might be in vogue right now, but this feels a little like bolting the stable door after the horse has disappeared over the horizon – even King Canute couldn’t hold back the tide.This article was written by Paul Golden at www.financemagnates.com.