Kraken parent Payward has partnered with Nasdaq to develop what the companies describe as an “equity transformation gateway,” a new infrastructure layer designed to connect regulated securities markets with permissionless blockchain networks. For crypto markets, the significance is clear: one of the largest traditional market operators is now working directly with a crypto-native tokenization framework to transfer shares between institutional rails and the DeFi environment.
The partnership centers on xStocks, Kraken’s tokenized stock product, which has surpassed $25 billion in total turnover less than a year after its launch, according to Payward. More than $4 billion of this volume has been settled on-chain, and the framework now counts more than 85,000 unique holders on supported networks, giving Kraken a significant footprint as tokenized shares move from concept to market structure.
Nasdaq and Kraken join forces
Under the proposed arrangement, xStocks will provide the permissionless infrastructure layer for Nasdaq’s upcoming issuer-sponsored stock ticker design. This design, which Nasdaq expects to be operational from the first half of 2027, is intended to preserve issuer control, the existing regulatory framework and the rights attached to the underlying shares, while allowing these assets to interact with blockchain-based financial systems.
From a practical perspective, the gateway should allow eligible users to exchange tokenized shares between regulated market environments and open chain ecosystems. Payward said this allows assets to move “fluidly” between institutional trading infrastructure and decentralized financial networks, while Payward Services manages KYC and AML for participants accessing money through Kraken.
Arjun Sethi, CEO of Payward and Kraken, sees the effort as a structural change in how shares can be used after they are placed on programmable rails. “Tokenization improves the market infrastructure at the asset layer and allows stocks to exist as programmable financial instruments that can operate in both regulated capital markets and open blockchain networks,” he said. “Today, most stocks are inside brokerage systems, whose profits are largely limited by directional influence and, in some cases, broker-specific margin adjustments.”
He claimed that the current model keeps the capital inside closed locations. “This structure distributes liquidity across all locations and commits significant amounts of capital relative to its potential returns,” Sethi said. “With xStocks, our goal is to synchronize stocks across all trading venues, financial applications and blockchain networks while maintaining issuer rights, regulatory protection and price integrity.”
Sethi went further, linking tokenized shares to a broader capital efficiency thesis that will be familiar to crypto derivatives traders. “Bringing stocks to a programmable infrastructure allows for control over how they perform within a portfolio,” he said. “Rather than simply representing exposure to a company, tokenized shares can function as collateral in unified trading systems that support spot markets, cross-margin trading, derivatives, perpetual futures and financing environments.”
This point is in the center of the announcement. Payward uses tokenized shares not only as traditional stock packaging, but as collateral that can move across all trading, lending and hedging systems within a single margin framework. In jurisdictions where xStocks are already available, Payward will also initially serve as the primary settlement layer for transactions related to the Nasdaq stock ticker design.
At press time, the total crypto market cap was $2.32 trillion.
Featured image created with DALL.E, chart from TradingView.com
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