Nasdaq partners with Kraken parent Payward to link tokenized equities with DeFi networks

Nasdaq is partnering with Kraken’s parent company Payward to develop infrastructure linking tokenized equities with blockchain networks, marking one of the clearest collaborations yet between a major stock exchange operator and a crypto platform around tokenized securities.

The initiative will center on building what the companies call an “equities transformation gateway,” designed to allow tokenized equities to move between regulated capital markets and decentralized blockchain ecosystems, according to a Monday announcement.

Per details shared by Kraken and Nasdaq, the system will rely on Kraken’s xStocks framework, which provides tokenized exposure to publicly traded equities on blockchain networks.

Kraken has said the product has already processed more than $25 billion in transaction volume since launching less than a year ago, including over $4 billion settled directly onchain.

Nasdaq stated that the collaboration will also support its upcoming equity token design, an effort to bring tokenization into regulated stock markets while preserving issuer control, investor protections, and the legal rights associated with company shares.

“Tokenization has the potential to unlock the benefits of an always-on financial ecosystem — enhancing how investors access markets and how issuers engage with shareholders,” Nasdaq President Tal Cohen said in a statement announcing the initiative.

Under the planned architecture, Nasdaq’s regulated market infrastructure will anchor the permissioned side of the system, while Kraken’s xStocks framework will power the blockchain-based infrastructure layer connecting tokenized equities to decentralized financial networks in eligible jurisdictions.

The gateway is intended to allow clients in eligible jurisdictions to swap tokenized equities between traditional market environments and decentralized ecosystems, creating interoperability between established financial infrastructure and global on-chain liquidity.

Kraken co-CEO and Payward executive Arjun Sethi argued that tokenization could fundamentally upgrade market infrastructure by allowing equities to function as programmable financial instruments.

“Tokenization improves market infrastructure at the asset layer by enabling equities to exist as interoperable instruments across regulated financial systems and open blockchain networks while preserving issuer rights and price integrity,” Sethi said.

Nasdaq expects the tokenized equity framework and related distributed ledger services to begin rolling out in the first half of 2027.

Tokenization gathers steam

The partnership adds to a series of moves by Kraken aimed at expanding tokenized equity infrastructure.

Indeed, the crypto exchange recently launched xChange, a unified execution layer for its xStocks ecosystem, and introduced round-the-clock perpetual markets tied to assets such as gold, major stock indexes, and companies including Apple, Nvidia, and Tesla.

Kraken has also drawn attention from traditional financial institutions after becoming the first crypto company to secure approval for a Federal Reserve master account. Notably, the regulatory win prompted criticism from several U.S. banking groups, as The Block previously reported.

The Nasdaq collaboration also reflects a broader shift among exchanges and regulators toward tokenizing traditional securities. Nasdaq itself has been exploring multiple blockchain-based market initiatives, including proposals tied to tokenized securities infrastructure and new market products.

Regulatory maturity and TradFi interest

Regulators are also beginning to outline frameworks for how tokenized equities could operate within existing financial rules.

Recent guidance from the Federal Reserve clarified that capital rules for tokenized securities will remain technology-neutral, while the Securities and Exchange Commission has signaled a gradual regulatory pathway for tokenized assets.

Traditional financial firms are increasingly stepping into the space as well. Intercontinental Exchange, the parent company of the New York Stock Exchange, recently invested in crypto exchange OKX as part of a broader strategy focused on tokenized equities and digital asset infrastructure.

Industry forecasts suggest the tokenization trend could greatly impact financial markets over the coming decade.

Ark Invest has projected that tokenized assets could exceed $11 trillion by 2030, while Standard Chartered has estimated that tokenized real-world assets could reach $2 trillion by 2028. Robinhood CEO Vlad Tenev has similarly predicted that most major financial markets will adopt tokenization frameworks before the end of the decade.