Nasdaq Pours $100M Into Kraken's Parent to Build Tokenized Stock Trading

Nasdaq Inc., the major stock exchange and financial infrastructure company, has committed $100 million to Payward Inc., the firm behind cryptocurrency platform Kraken. The investment marks an expansion of their joint effort to construct a tokenized equity framework that could reshape how stocks trade and settle.

The two organizations first revealed their collaboration in March, when they unveiled plans for Nasdaq Equity Tokens paired with Payward's xStocks ecosystem. That framework would enable the digitization and issuance of equities across varied market settings while safeguarding investor rights and regulatory protections.

How Equity Tokenization Works

Tokenizing equities transforms conventional stock shares into digital assets tracked on blockchain infrastructure. Instead of paper certificates held within a traditional centralized exchange, shares become cryptographic tokens recorded on a distributed ledger. Smart contracts—self-executing code on blockchain networks—manage corporate functions like dividend payouts, regulatory compliance and shareholder voting automatically.

Market Infrastructure and Settlement Speed

Nasdaq's Digital Liquidity Networks division will oversee the partnership, concentrating on developing continuous market infrastructure for the movement of capital and assets. According to Nasdaq President Tal Cohen, "The next era of market evolution will be defined by how efficiently and seamlessly capital and assets move across the financial system with durable liquidity."

Payward Co-Chief Executive Arjun Sethi emphasized the efficiency gains at stake. The U.S. clearing system processes more than $2 trillion in daily stock trades, with buys and sells netting to roughly 98% of volume. Clearing houses currently maintain $10 billion to $20 billion in collateral for approximately one day to complete settlement. Sethi noted that "Cutting that wait from two days to one in 2024 released $3 billion," and that "On-chain settlement removes the wait."

Expanded Collaboration and Market Integrity

Under the deepened partnership, Payward will integrate Nasdaq's industry-leading audit technology into its range of trading platforms spanning crypto, equities, tokenized equities, futures and options. This expanded cooperation and enhanced capabilities are intended to strengthen market integrity and bolster investor confidence in the emerging tokenized market infrastructure.

Modernizing Without Replacing

Nasdaq, the New York Stock Exchange LLC and the Depository Trust Co. are moving to bring equity trading onto blockchain-based systems without establishing a separate crypto marketplace. Through comparable emerging frameworks, existing shares and exchange-traded funds can be issued or represented in tokenized form while preserving their original ticker symbols, legal entitlements and regulated trading venues. The objective is not to dismantle the stock market in favor of tokens, but rather to upgrade the underlying systems so identical securities can eventually move, settle and be recorded with greater efficiency on digital ledgers.