Nasdaq and Kraken Partner on Equity Tokenization
Nasdaq and Kraken parent Payward are collaborating to build tokenization infrastructure. The project uses the xStocks platform to move securities onto blockchains.
Nasdaq, Inc. has announced a strategic collaboration with Payward, the parent company of the cryptocurrency exchange Kraken, to develop tokenization infrastructure aimed at modernizing blockchain-based equities. Tokenization is the process of converting traditional financial assets—such as bank deposits, stocks, bonds, and real estate—into digital assets that can be traded on the blockchain ledgers that underpin digital markets.
The partnership follows an initiative in September where the exchange operator sought approval from the Securities and Exchange Commission to facilitate trading in both traditional and tokenized formats. Institutional adoption of digital asset infrastructure has progressed in the United States following the passage of the GENIUS Act last year, though further regulatory frameworks are still being debated.
Under the agreement, Nasdaq will utilize Payward’s xStocks tokenization platform to enable clients to move securities from institutional trading infrastructure to blockchain networks. The plans for tokenizing stocks and other exchange-traded products will focus on streamlining corporate actions, proxy voting, and shareholder engagement.
Competition in the space is growing as other major financial institutions seek to integrate blockchain technology. In January, Intercontinental Exchange, the parent of the New York Stock Exchange, announced it was seeking regulatory clearance for a platform to enable 24/7 trading and on-chain settlement of tokenized securities. While Robinhood Markets, Inc., Gemini, and Kraken have already launched tokenized stock products in Europe, Coinbase Global, Inc. and the startup Dinari are currently pursuing similar approvals for the American market.
Despite the technological push, investors remain divided on the role of cryptocurrencies in portfolios as Bitcoin prices continue to fluctuate near levels seen prior to the 2024 presidential election. However, Nasdaq leadership highlighted the potential for structural improvements in market accessibility.
\"Tokenization has the potential to unlock the benefits of an always-on financial ecosystem – enhancing how investors access markets, how issuers engage with shareholders,\" said Tal Cohen, president of Nasdaq.
