Payward, parent company of crypto exchange Kraken, announced on Monday a partnership with Nasdaq to develop next-generation infrastructure connecting tokenized equity capital markets with decentralized blockchain networks.
The initiative will build on the growing adoption of xStocks, which provide tokenized exposure to publicly traded equities across blockchain ecosystems. Since launching less than a year ago, xStocks have surpassed $25 billion in total transaction volume, including more than $4 billion settled on-chain, with over 85,000 unique holders across supported networks.
“Tokenization upgrades market infrastructure at the asset layer by allowing equities to exist as programmable financial instruments that can operate across both regulated capital markets and open blockchain networks. Today, most equities sit inside brokerage systems where their utility is largely limited to directional exposure and, in some cases, broker-specific margin arrangements,” said Arjun Sethi, Co-CEO of Payward and Kraken.
Partnership to support upcoming Nasdaq equity token design
The collaboration with Payward will support the upcoming Nasdaq equity token design, a new approach to tokenizing equities that will support tokenization of equities in a manner that preserves issuer control, existing regulatory frameworks and the underlying rights associated with company shares.
“Both organizations believe tokenization has the potential to transform capital markets, modernizing how securities are traded and settled while enabling greater global access, programmability and operational efficiency across financial infrastructure,” said Payward.
Gateway to connect permissioned equity markets with permissionless decentralized financial networks
As part of the partnership, Payward will develop an equities transformation gateway with Nasdaq that is powered by the xStocks framework and designed to connect regulated, permissioned equity markets with permissionless decentralized financial networks in jurisdictions where xStocks are available.
Within this architecture, the xStocks framework will serve as the infrastructure layer powering the permissionless ecosystem, enabling tokenized equities to interact with open blockchain networks while remaining aligned with the underlying securities traded within regulated markets.
The gateway will allow clients in eligible jurisdictions to seamlessly swap tokenized equities between a regulated, permissioned market environment and the permissionless DeFi ecosystem, enabling assets to move fluidly between institutional trading infrastructure and global on-chain financial networks.
“Bringing equities onto programmable infrastructure expands how they can function within a portfolio. Instead of simply representing exposure to a company, tokenized equities can operate as collateral within unified trading systems that support spot markets, cross-margin trading, derivatives, perpetual futures and financing environments,” added Sethi.
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Payward to become foundational settlement layer for Nasdaq equity token design transactions
To support the integrity of the ecosystem, Payward Services will provide KYC and AML onboarding for tokenized equities through the Kraken platform, ensuring participants accessing the gateway between regulated permissioned equity markets and the permissionless decentralized ecosystem meet applicable compliance requirements in relevant jurisdictions.
Payward will also serve as the primary and foundational settlement layer for Nasdaq equity token design transactions for an initial period, providing the infrastructure necessary to enable secure and efficient tokenized equity settlement across connected networks.
By connecting Nasdaq’s market infrastructure with the xStocks ecosystem, the gateway is designed to create interoperability between institutional trading environments and decentralized networks. This architecture allows equity securities to move fluidly between regulated capital markets and global on-chain networks, while preserving issuer rights, regulatory compliance and price integrity.
“By combining Nasdaq’s leadership in regulated equity markets with Payward’s digital asset infrastructure and Kraken’s global trading platform, we are helping build the liquidity layer risk engine and financial applications that allow tokenized equities to function within a more global, continuous and capital-efficient financial system,” added Sethi.
Nasdaq revealed that it expects its Nasdaq equity tokens design and related distributed ledger technology (DLT)-based services to become operational beginning in H1 2027.
