The major overhaul of the financial system for night trading pricing—why Nasdaq's 5×23 hours is a precursor to tokenization

The days of staying awake to trade US stocks are truly here.

Recently, Nasdaq officially submitted an application to the U.S. Securities and Exchange Commission (SEC), proposing to extend trading hours from the current 5 days a week, 16 hours per day, to 5 days a week, 23 hours per day. Once approved, US stock trading will run from 21:00 on Sunday to 20:00 on Friday, with only a 1-hour maintenance window in between. The official explanation is to meet the needs of investors in Asia and Europe, but a deeper look into the logic behind this reveals that Nasdaq is conducting an extreme stress test, rehearsing for a “never-closing” financial system.

This is not simply about “opening a few more hours,” but a systemic challenge to the entire traditional financial infrastructure.

What the “last 1 hour” of being squeezed out reveals

On the surface, changing from 5×16 to 5×23 is just a numerical adjustment, but for the entire TradFi ecosystem, it nearly pushes existing financial infrastructure to its physical limits.

US stock trading is not an independent system. Behind Nasdaq, brokers, clearinghouses, regulators, and even listed companies need to work seamlessly together. To support a 23-hour trading regime, all participants must undergo deep transformations:

• Brokerages and dealers must extend customer service, risk control systems to operate around the clock, significantly increasing operational costs
• Clearing agencies (like DTCC) need to upgrade clearing and settlement systems to service hours until 4 a.m. to comply with “next-day settlement for after-hours trading”
• Public companies must readjust their financial reporting schedules, and investor relations teams must adapt to the new reality that “significant information is priced in by the market in non-traditional hours”

The most interesting question is: if a reform is decided, why not implement 7×24 in one go, instead of leaving this awkward 1 hour?

The answer is in Nasdaq’s public disclosures. That 1 hour is mainly used for system maintenance, testing, and trade settlement. This exposes a fatal weakness in traditional financial architecture — under the current centralized clearing and settlement system, a downtime period is necessary for batch data processing and margin settlement. Just like bank branches still need to reconcile accounts after hours, this 1 hour is a “fault-tolerance window” in the real world.

But it also reveals a deeper issue: The settlement logic of traditional finance is fundamentally batch processing, not streaming. That 1 hour is the limit that TradFi can push under the current architecture.

In contrast, blockchain-based crypto assets rely on distributed ledgers and smart contracts for atomic settlement, inherently possessing the 7×24×365 trading DNA. No closing bell, no market halt, no need to cram key processes into a fixed end-of-day window. This explains why Nasdaq is making such an effort for this “unpopular” move — as the line between crypto markets and traditional finance blurs, the increasing liquidity demand from traditional exchanges comes from cross-timezone, cross-session global capital.

What risks does extending after-hours pricing trading bring?

But “5×23” does not simply lead to “better price discovery.” In fact, it introduces a series of new microstructure-level challenges.

First, look at trading volume data. The latest statistics from NYSE show that activity during non-traditional trading hours (pre-market, after-hours) has exploded. In a certain quarter of 2025, non-trading hours saw over 2 billion shares traded, with a transaction value of $62 billion, accounting for 11.5% of US stock trading that quarter. Platforms like Blue Ocean, OTC Moon, and other night trading venues also continue to grow. These data tell one thing: global investors, especially Asian retail investors, have a real demand to trade US stocks in their own time zones.

What Nasdaq is trying to do is not to create this demand, but to re-centralize the off-market, low transparency night trading that was previously scattered outside the exchange, into a regulated, centralized trading system. But this creates a dilemma:

Fragmentation of liquidity crisis: Although extending trading hours could theoretically attract more cross-timezone capital, in practice, limited trading demand is spread over a longer period. Especially during “night” hours, trading volume is already lower than during regular hours, and extending hours could lead to wider spreads, reduced liquidity, increased trading costs for retail investors, and higher price volatility. In low-liquidity periods, it becomes easier to manipulate prices through pump-and-dump schemes.

Hidden changes in price discovery power: The fragmentation of liquidity among institutional players does not disappear; it just shifts from “off-market dispersed” to “on-market distributed over time.” This raises the cost of risk control models and execution strategies.

Amplification of black swan risks: Under the 23-hour framework, any major sudden event (earnings surprises, regulatory statements, geopolitical conflicts) can be instantly translated into trading orders. The market no longer has the buffer of “sleeping on it overnight.” In the relatively thin liquidity environment of night trading, such immediate reactions are more likely to trigger gaps and chain reactions.

Therefore, this is far from a simple “open a few more hours” scenario; it is an extreme stress test on TradFi’s entire price discovery mechanism, liquidity structure, and risk transmission.

The triad alliance of regulation, clearing, and exchanges

Looking at Nasdaq’s recent intensive moves, it’s clear this is a highly coordinated strategic layout. The ultimate goal is straightforward: to enable stocks to eventually circulate, settle, and price like tokens.

The timeline looks like this:

May 2024: US stock settlement system shortens from T+2 to T+1 — seemingly conservative, but actually a key infrastructure upgrade.

Early 2025: Nasdaq begins signaling “all-weather trading,” planning to launch continuous trading services in the second half of 2026.

Mid-2025: Nasdaq quietly advances the integration of Calypso systems with blockchain technology for 7×24-hour automated margin and collateral management. This doesn’t visibly change ordinary investors but signals to institutions.

Late 2025: Nasdaq actively promotes systemic reforms. First, it submits an application to the SEC for stock tokenization trading, then explicitly states that tokenized US stocks are a top priority and will be pushed forward “at the fastest speed.”

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

December 2025: DTC, a subsidiary of DTCC, receives SEC no-objection letter, approving the provision of real-world asset tokenization services in a controlled environment, with plans to launch in the second half of 2026.

Almost simultaneously, Nasdaq submitted an application for a 23-hour trading system.

These three threads — regulation (SEC) policy direction, infrastructure (DTCC) technological empowerment, and trading venue (Nasdaq) institutional innovation — are synchronized on the same timeline. The high degree of coordination makes it hard not to believe: this is not coincidence but a highly orchestrated systemic project.

The 23-hour trading regime is not a single-point reform but a necessary step in Nasdaq’s tokenization roadmap. Because future tokenized assets will inevitably pursue 7×24 liquidity, and the current 23 hours is the closest transitional state to on-chain rhythm. Once investors’ trading habits are reshaped by “5×23,” users will inevitably ask: why tolerate that 1-hour interruption? Why not trade on weekends? Why not settle instantly with USDC?

When appetite is thoroughly raised, only native 7×24 tokenized assets can fill that last hour gap. That’s why Coinbase, Ondo, Robinhood, and other players are racing — the market’s desire for a never-closing financial system has become an unstoppable tide.

Extending after-hours pricing and trading time may seem like a small step, but it’s actually the final sprint of traditional finance’s evolution toward on-chain finance. The future is still early, but the time left for the old era is running out.