Sept 10 - Nasdaq said on Thursday its venture arm agreed to invest $100 million in Payward, the parent company of cryptocurrency exchange Kraken, deepening a partnership aimed at building infrastructure for tokenized equities.
The move is part of a broader push by established exchange operators to develop tokenized securities and related systems, seeking to capture investor interest in blockchain-based assets and to position themselves alongside crypto-native platforms that are moving into stocks and derivatives trading.
Planned capabilities
Nasdaq and Payward said they will develop systems intended to allow tokenized assets to trade and settle outside conventional market hours - while retaining regulatory compliance and market protections. The firms expect those arrangements to preserve investor safeguards associated with regulated market infrastructure, including transparency, market integrity and liquidity.
The partnership is structured around Payward’s xStocks platform and is expected to produce Nasdaq Equity Tokens, or NETs, which the companies plan to launch in the second quarter of 2027.
Leadership comment
Arjun Sethi, Co-CEO of Payward, described the next step in the collaboration as an effort to advance Nasdaq Equity Tokens onto rails that do not close, with shareholder rights intact.
Background of the collaboration
This investment builds on a collaboration the two firms announced in March, under which Nasdaq said it would work with Payward to create tokenization infrastructure. Shortly after that announcement, Nasdaq received approval from the U.S. Securities and Exchange Commission to allow certain stocks to be traded and settled in tokenized form.
Key points
- Nasdaq's venture arm will invest $100 million in Payward, the parent company of Kraken, to expand their work on tokenized equities.
- The companies aim to enable trading and settlement of tokenized assets outside standard market hours while maintaining regulatory compliance and market protections; Nasdaq Equity Tokens are targeted for launch in Q2 2027 on Payward’s xStocks platform.
- Sectors impacted include capital markets infrastructure, cryptocurrency exchanges, and securities trading systems.
Risks and uncertainties
- Regulatory and compliance requirements remain central to the initiative; the project hinges on maintaining market safeguards while enabling non-stop trading - this affects market infrastructure and regulatory oversight.
- Execution risk related to building and integrating new tokenization infrastructure with existing trading and settlement systems could impact capital markets and crypto trading platforms.
Nasdaq characterized its tokens as intended to retain the core benefits of regulated market infrastructure, including investor transparency, market integrity and liquidity. The firms plan to continue developing the technical and regulatory framework ahead of the planned NETs launch in 2027.