Payward, the parent company of the Kraken cryptocurrency exchange, has formed a strategic partnership with Nasdaq to create an advanced equities transformation gateway. This system will link permissioned tokenized equity markets with decentralized blockchain networks, powered by Payward’s xStocks framework.
The goal is to enable tokenized shares to transfer between institutional trading environments and open DeFi platforms in jurisdictions where the service is legally offered.
The collaboration builds on the success of xStocks, which deliver blockchain-based exposure to publicly traded equities.
Since its launch less than a year ago, the product has generated over $25 billion in total transaction volume, including more than $4 billion settled directly on-chain.
It has also attracted more than 85,000 unique holders across supported networks, solidifying its position as a leading infrastructure for on-chain equity tokens.
Nasdaq’s upcoming equity token framework, scheduled to become operational in the first half of 2027, introduces a fresh approach to tokenizing shares.
The design preserves full issuer control, complies with existing regulatory requirements, and protects the core rights of company shareholders.
Payward will act as the primary settlement layer for these transactions in eligible regions, while its services division handles KYC and AML compliance to meet onboarding standards.
At the core of the initiative is the xStocks-powered gateway.
It serves as the permissionless infrastructure layer that supports Nasdaq’s issuer-sponsored tokens, allowing interaction between regulated capital markets and decentralized ecosystems.
Clients in approved jurisdictions will be able to move tokenized equities fluidly between permissioned institutional platforms and open blockchain networks, unlocking new levels of liquidity and flexibility.
Both organizations emphasize that tokenization can fundamentally modernize capital markets.
By combining Nasdaq’s established market infrastructure with Payward’s blockchain expertise, the gateway promotes greater global access, enhanced programmability, and improved operational efficiency for securities trading and settlement.
Arjun Sethi, Co-CEO of Payward and Kraken, highlighted the transformative impact.
He noted that tokenization elevates equities into programmable instruments capable of operating across regulated venues and open networks.
Traditional brokerage systems often limit utility to basic directional exposure or platform-specific margin, leading to fragmented liquidity and underutilized capital.
With xStocks, equities gain native interoperability across trading venues, financial applications, and blockchain ecosystems while safeguarding issuer rights, regulatory protections, and price integrity.
Sethi illustrated the capital-efficiency benefits using a simple portfolio utilization model: utilization equals total market exposure divided by required collateral.
In siloed systems, this ratio remains artificially low because each venue demands isolated collateral.
Interoperability changes the equation, enabling the same collateral base to support multiple strategies simultaneously.
Total exposure then becomes the sum of positions across venues, all governed by a unified real-time risk framework.
For international investors, this expands access to public markets where traditional brokerage options are limited.
In mature markets, it boosts efficiency by allowing equity holdings to serve dynamically as collateral in spot trading, cross-margin setups, derivatives, perpetual futures, and financing environments.
Settlement friction decreases as assets move programmatically, freeing capital to flow more effectively across strategies.
The partnership integrates Nasdaq’s leadership in regulated equities with Payward’s digital asset infrastructure and Kraken’s global trading platform.
It aims to build the necessary liquidity layer, risk management tools, and applications for a more connected, continuous, and capital-efficient financial system.
Nasdaq expects its equity tokens and related distributed ledger technology services to launch in the first half of 2027. This alliance signals a step forward in the convergence of traditional finance and blockchain. By creating interoperable pathways for tokenized equities, Payward and Nasdaq are laying the groundwork for advancements in capital markets.