Nasdaq on Monday announced its equity token design, a framework for tokenizing public company shares while maintaining legal and regulatory integrity, modernizing investor engagement and enabling continuous trading.
The stock exchange giant has partnered with Payward, Kraken’s parent company, to create a gateway connecting permissioned and permissionless markets for tokenized shares, providing legal equivalence, investor protection and issuer oversight.
The initiative aims to give issuers more control over their tokenized shares while introducing programmable features that modernize how companies interact with shareholders on issues including proxy voting, corporate actions and management rights.
According to Tal Cohen, president of Nasdaq, tokenized securities can open up advantages for both investors and issuers. According to him, the framework is designed to empower public companies and expand global participation in US stock markets.
“We believe that public companies should always remain at the center of the stock market ecosystem. This issuer-sponsored securities approach is designed to empower public companies and increase global access to US equity markets,” said Cohen.
The move is based on a Nasdaq tokenization proposal filed with the SEC last September, which sought approval for equity securities, including issuer-sponsored tokens, to be traded on markets and settled through the DTCC.
The program complies with the SEC’s 2026 Staff Statement on Tokenized Securities, which established that tokenized shares will receive the same treatment under federal law as traditional securities.
The stock conversion gateway developed with Payward will be available to customers in the territories where xStocks currently operates, expanding its reach beyond domestic markets.
According to Arjun Sethi, CEO of Kraken, tokenized shares improve market infrastructure by harmonizing traditional financial systems and blockchain networks without compromising issuer rights or price stability.
“For international clients, this expands access to public markets where traditional distribution has been limited. For US clients, it allows for increased collateral efficiency and capital mobility during business operations and financing,” said Sethi.
Nasdaq plans to work with issuers, transfer agents, regulators, infrastructure operators and market participants to develop the token framework.
The exchange expects the program to be available to issuers from the first half of 2027 with additional book distribution technology services.
