The impact of the "5×23 hours" trading system on the global market: A look at the transformation of the US stock market from the perspective of the Japanese stock market opening hours

When Nasdaq announced it would submit a 5×23-hour trading application to the U.S. Securities and Exchange Commission (SEC) on December 15, a key question arose: why does this revolution in U.S. stock trading hours have a profound impact on the opening times of the Japanese stock market and even the entire Asian market?

Previously, trading U.S. stocks meant sleepless nights; in the future, it might also mean being unable to work well during the day. As the cryptocurrency market has long been accustomed to a 7×24 never-sleep rhythm, the traditional financial giant Nasdaq has also begun to consider how to break free from the confines of time.

Once approved by the SEC, U.S. stocks will trade from 21:00 on Sunday until 20:00 on Friday, with only a 1-hour market close window each day. This means that for Asian investors in the GMT+8 time zone, there will be no need to choose to trade in the early morning hours, but it also signals a structural reorganization of the global financial system is brewing.

The Trading Time Battle: A Look at Global Time Zone Competition from the Perspective of the Japanese Market Opening Time

Any Asian investor who has studied the opening time of the Japanese stock market knows this pain point—Japan’s stock market opens at 9:00 AM Tokyo time, which is late at night for U.S. West Coast investors, and the traditional U.S. market opening time (09:30 New York time) is also late at night for Asian investors. Time zone differences have always been a natural barrier to global capital flows.

Under the original 5×16-hour framework (pre-market, market hours, after-hours), trading volume outside traditional trading hours in U.S. stocks has long been significant. According to NYSE data, in Q2 2025, non-trading hours trading volume exceeded 2 billion shares, with a transaction value of $62 billion, accounting for 11.5% of U.S. stock trading that quarter—setting a new record. Meanwhile, night trading platforms like Blue Ocean and OTC Moon have also seen continuous growth in transaction volume.

The logic behind this is clear: global investors, especially Asian retail investors, are “trading U.S. stocks in their own time zones.” The Japanese stock market opening time, as a reference anchor for Asian investors, can no longer meet the demand for cross-hemisphere trading.

Nasdaq sees exactly this. Its approach is not to create demand but to re-integrate the scattered, low-transparency off-market trades into a compliant, centralized trading system. This new 5×23 model not only satisfies the real demand of Asian markets to “trade U.S. stocks in their own time zones” but also provides U.S. regulators with greater market transparency and control.

Infrastructure Limits: The 1-Hour Gap Behind 23 Hours of Trading

On the surface, extending trading hours simply lengthens the market open from 16 to 23 hours, but in reality, it pushes the existing TradFi financial infrastructure system to its physical limits.

Supporting a 23-hour trading system requires deep modifications: brokerages and dealers must operate customer service and risk control systems around the clock, with labor costs rising sharply; clearing agencies (like DTCC) need to upgrade clearing and settlement systems to extend service until 4 a.m. to meet the “next-day settlement for night trading” rule; listed companies must also reassess the pace of financial report disclosures and major announcements.

Most intriguing is the remaining 1 hour (20:00-21:00). According to Nasdaq’s public disclosures, this hour is mainly used for system maintenance, testing, and trade settlement—exposing the Achilles’ heel of the traditional centralized clearing and settlement system. Under the architecture based on DTCC and broker systems, a physical downtime is necessary for batch data processing and margin settlement, similar to bank branches closing after hours for reconciliation.

In contrast, blockchain-based cryptocurrencies and tokenized assets rely on distributed ledgers and smart contracts for atomic settlement, inherently supporting 7×24×365 trading without a concept of closing. This explains why Nasdaq is making such efforts to push this reform— as the boundary between crypto markets and traditional finance blurs, the incremental demand for traditional exchanges increasingly comes from cross-time-zone capital flows and longer trading hours.

Liquidity Fragmentation and the Reshaping of Pricing Power

The “5×23” trading model presents a double-edged sword in market effects.

First is the risk of liquidity fragmentation. Although extending trading hours theoretically attracts more cross-time-zone capital, in practice, limited trading demand is spread over a longer period. Night trading hours already correspond to lower U.S. stock trading volume; extending them may lead to wider spreads, reduced liquidity, increased trading costs and volatility, and even more frequent pump-and-dump phenomena during thin trading periods.

Second is the potential change in the structure of pricing power. Nasdaq aims to capture scattered orders diverted to off-market platforms through “5×23,” but for institutional investors, liquidity fragmentation does not disappear—it merely shifts from “off-market dispersion” to “on-market time-based,” raising the costs of risk control and execution models.

Finally, the amplification of black swan risks. Under the 23-hour framework, major sudden events (such as earnings misses, regulatory statements, geopolitical conflicts) can be instantly translated into trading orders, with no overnight buffer for market digestion. In the relatively illiquid night session, such immediate reactions are more likely to trigger gaps and chain reactions of sharp volatility.

Therefore, “5×23” is not simply about opening a few more hours; it is a systemic stress test on traditional finance’s price discovery mechanisms, liquidity structures, and the distribution of pricing power.

The Hidden Synergy of Regulation, Infrastructure, and Exchanges: The Final Sprint of Tokenization

Connecting Nasdaq’s recent intensive moves, it becomes even clearer that this is a carefully planned strategic puzzle, with the core goal of enabling stocks to have the same circulation, settlement, and pricing capabilities as tokens.

Nasdaq has chosen a gentle path of reform. In May 2024, the U.S. stock settlement system will shorten from T+2 to T+1; early in 2025, Nasdaq will begin to release intentions for “around-the-clock trading,” planning to launch continuous trading in the second half of 2026; subsequently, the focus will shift to backend systems—integrating blockchain technology into the Calypso system for 7×24 automated margin and collateral management.

By the second half of 2025, Nasdaq is actively advancing on the regulatory and institutional front. In September, it submitted an application for tokenized stock trading to the SEC; in November, it explicitly prioritized tokenized U.S. stocks and announced “pushing forward at the fastest speed.”

Almost simultaneously, SEC Chairman Paul Atkins stated in an interview that tokenization is the future direction of capital markets, expecting that “within about two years, all U.S. markets will migrate onto the blockchain for on-chain settlement.”

Against this backdrop, Nasdaq submitted its 5×23 trading application to the SEC on December 15.

What is most noteworthy is the high level of coordination demonstrated in 2025 among regulation (SEC), infrastructure (DTCC), and trading venues (Nasdaq):

SEC easing regulations: continuously releasing expectations of “full on-chain,” injecting certainty into the market;

DTCC solidifying its foundation: on December 12, DTCC’s subsidiary, DTC, received SEC no-objection letter, approving its plan to provide real-world asset tokenization services in a controlled environment, scheduled for formal launch in late 2026, addressing the core compliance issues of clearing and custody;

Nasdaq’s push: announcing tokenized stock plans, prioritizing deployment, submitting the 23-hour trading application, and attracting global liquidity.

When these three lines are aligned on the same timeline, this coordinated staging indicates: this is not coincidence but a highly synchronized, continuous institutional engineering effort. Nasdaq and the U.S. financial markets are making the final sprint toward a “non-stop financial system.”

Conclusion: The Critical Point of the Never-Closing Era

Once Pandora’s box is opened, “5×23 hours” is only the first step.

Human needs, once unleashed, become irreversible. When U.S. stocks can be traded at midnight, investors will inevitably ask: why endure that 1-hour interruption? Why not trade on weekends? Why not settle instantly with stablecoins?

As global investors (whether from Asia where the Japanese market opens or from other time zones) are thoroughly enticed by “5×23 hours,” the flaws of the existing TradFi architecture will be fully exposed. Only native 7×24 tokenized assets can fill that last one-hour gap.

For this reason, players like Coinbase, Ondo, Robinhood, and MSX are racing—competing in the upcoming wave of asset tokenization.

The future is still early, but there is little time left for the “old clock.”