Payward, the parent company of cryptocurrency exchange Kraken, has partnered with Nasdaq to build a gateway connecting traditional stock markets with blockchain networks.
The project will use Payward’s xStocks platform to move tokenized equities between regulated institutional markets and permissionless decentralized finance (DeFi) networks in regions where the service is approved, Kraken said.
In short, tokenization turns financial assets, like stocks, bonds, or funds, into digital tokens that can operate on blockchain networks.
For equities, tokenization allows shares to maintain their usual rights, including voting and dividends, while also being traded on digital networks or integrated into financial applications built on blockchain.
xStocks has already handled more than $25 billion in transactions since its launch, including $4 billion settled directly on-chain.
Last week, Kraken became the first crypto-native firm to gain direct access to the Federal Reserve’s core payment system after its banking arm, Kraken Financial, received a master account from the Fed.
This lets the company settle dollar payments on Fedwire without relying on intermediary banks, putting it on the same rails as traditional banks and credit unions.
Kraken gateway links tokenized and regulated equities
The platform has over 85,000 holders across supported networks. Nasdaq’s equity token framework, expected to go live in the first half of 2027, will preserve issuer control, follow existing regulations, and maintain the rights of shareholders.
The gateway is designed to make it easier to move tokenized shares between regulated markets and open blockchain networks.
Clients will be able to swap assets from institutional trading systems to decentralized networks while staying compliant with local rules. Payward Services will handle KYC and AML checks, making sure everyone accessing the gateway meets regulatory standards.
Arjun Sethi, Co-CEO of Payward and Kraken, said tokenization changes how equities function at a fundamental level. Traditional shares often stay locked inside brokerage systems, limiting their use to simple buying, selling, or broker-specific margin arrangements.
Tokenized equities can move between venues and blockchain networks, allowing the same shares to serve as collateral across multiple trading strategies at once.
This can expand effective exposure across markets while keeping risk under control through a unified margin system.
For international investors, tokenized equities can open access to markets where traditional brokerages are hard to reach. In more developed markets, tokenization can improve capital efficiency, letting equity collateral be used for trading, lending, and hedging within a shared pool of liquidity.
This partnership comes as tokenized equities expand globally. Platforms like Robinhood, Gemini, and Coinbase already offer tokenized stocks in Europe.
Nasdaq previously asked the U.S. Securities and Exchange Commission to allow tokenized and traditional versions of stocks and ETFs to trade side by side. Both forms would settle through the Depository Trust to stay interchangeable.
Tal Cohen, president of Nasdaq, said tokenization could create an “always-on financial ecosystem” where investors can access markets and issuers can engage with shareholders in new ways.