Nasdaq has invested $100 million in Payward, Kraken's parent company valued at $21 billion, converting a previously announced partnership into a concrete financial commitment. The two firms plan to develop on-chain stock trading, settlement, and storage solutions.
The partnership combines Nasdaq's experience in regulated markets with Kraken's expertise in crypto trading systems and custody solutions. Together, they aim to reduce entry barriers for institutions entering tokenized equity markets.
The collaboration centers on an Equities Transformation Gateway (ETG), announced in March, which connects Nasdaq's regulated systems with Kraken's xStocks infrastructure. Under this model, issuers maintain control of their securities while token rights mirror those of common stock. Blockchain records would link directly to official shareholder registers, preserving governance, voting, and corporate action rights.
If launched in the first half of 2027, the gateway could widen market access and deepen liquidity. However, success depends on regulatory approval, issuer participation, and reliable settlement across both market systems.
Significant barriers remain. xStocks currently serves more than 110 markets but excludes major capital markets including the U.S., UK, Canada, and Australia. This geographic restriction limits available capital and keeps trading activity fragmented across smaller pools, maintaining wide spreads and unreliable pricing. The tokenized equity market currently holds approximately $2.9 billion in total value.
Regulatory and custody differences across jurisdictions add complexity and expense to expansion efforts. Real progress following a 2027 launch will depend on sustained capital participation from brokers and asset managers. Without sufficient institutional demand, improved infrastructure alone may have limited impact.
