Nasdaq announced Monday it will collaborate with Payward, Kraken’s parent company, to develop tokenized equity infrastructure targeting blockchain-based securities trading. The partnership aims to bridge traditional regulated markets with decentralized finance ecosystems, potentially expanding access to U.S. equities globally.
Key Takeaways
- Nasdaq equity token design expected operational by H1 2027
- xStocks processed $25 billion volume since launching under year
- Gateway connects regulated markets with DeFi blockchain networks
Market Context and Infrastructure Development
The collaboration builds on Kraken’s xStocks tokenized equity product, which has processed more than $25 billion in total transaction volume since launching less than a year ago 1. More than $4 billion has been settled on-chain, with over 85,000 unique holders across supported networks.
Nasdaq’s equity token design represents a new framework for tokenizing stocks while preserving issuer control and existing regulatory frameworks. The system is expected to become operational in the first half of 2027, subject to regulatory approvals.
Technical Architecture
The partnership will create an “equities transformation gateway” powered by the xStocks framework, designed to connect regulated, permissioned equity markets with permissionless decentralized financial networks. Payward will serve as the primary settlement layer for Nasdaq equity token transactions in eligible jurisdictions.
The gateway allows clients to swap tokenized equities between regulated market environments and DeFi ecosystems. Payward Services will provide know-your-customer and anti-money laundering compliance for participants accessing the system 2.
Management Perspective
“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,” said Arjun Sethi, co-CEO of Payward and Kraken 3.
“Today most equities sit inside brokerage systems where their utility is largely limited to directional exposure and, in some cases, broker-specific margin arrangements. That structure fragments liquidity across venues and leaves a meaningful amount of capital static relative to its potential utility.”
Regulatory Foundation
The tokenization initiative builds on Nasdaq’s proposal submitted to the Securities and Exchange Commission in September 2025. That proposal sought approval for tokenized versions of listed stocks and exchange-traded products to trade alongside traditional shares through existing Depository Trust infrastructure 4.
xStocks are currently unavailable to U.S. persons and not registered under U.S. securities laws. The tokens are offered through regulated entities in Bermuda and Cyprus under European MiFID II authorization.
Market Expansion Strategy
The partnership extends beyond technology development to market access expansion. For international customers, tokenized equities could expand access to public markets where traditional brokerage distribution is limited or operationally complex.
Sethi emphasized capital efficiency benefits, noting tokenized equities can operate as collateral within unified trading systems supporting spot markets, derivatives, and financing environments. The infrastructure aims to increase portfolio utilization while maintaining risk management frameworks.
Industry Context
Several regulated venues have already integrated xStocks, including Deutsche Börse’s 360X trading platform, where tokenized equities began trading in early 2026. The tokens include exposure to major stocks like Google, Nvidia, and Tesla through blockchain-based instruments 5.
Payward acquired Backed Finance, the original xStocks issuer, to unify tokenized securities issuance and trading operations. The company has partnerships with brokerage and custody providers to support underlying stock holdings backing the on-chain instruments.
Not investment advice. For informational purposes only.
References
1KrakenFX (2026-03-09). “Payward partners with Nasdaq to develop xStocks-powered gateway connecting permissioned and permissionless tokenized equities markets”. Kraken Blog. Retrieved March 9, 2026.
2Business Wire (2026-03-09). “Payward Partners with Nasdaq to Develop xStocks-Powered Gateway Connecting Permissioned and Permissionless Tokenized Equities Markets”. Business Wire. Retrieved March 9, 2026.
3KrakenFX (2026-03-09). “Payward partners with Nasdaq to develop xStocks-powered gateway connecting permissioned and permissionless tokenized equities markets”. Kraken Blog. Retrieved March 9, 2026.
4Jared Kirui (2026-03-09). “Kraken Teams Up with Nasdaq to Bring Traditional Stocks onto Blockchain Networks”. Finance Magnates. Retrieved March 9, 2026.
5Jared Kirui (2026-03-09). “Kraken Teams Up with Nasdaq to Bring Traditional Stocks onto Blockchain Networks”. Finance Magnates. Retrieved March 9, 2026.