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Kraken's parent company Payward is partnering with Nasdaq to build infrastructure that enables tokenized equities to move between regulated capital markets and decentralized blockchain networks, blending traditional market controls with open-network accessibility.
The "equities transformation gateway," powered by Kraken's xStocks framework, will allow clients in eligible jurisdictions to swap tokenized stocks between regulated trading environments and permissionless DeFi platforms, Kraken said in a blog post on Monday. Nasdaq's equity token design, expected to launch in the first half of 2027, will preserve issuer control and existing regulatory protections while enabling tokenized shares to operate on blockchain networks.
xStocks has gained rapid adoption since launching less than a year ago, surpassing $25 billion in total transaction volume with over 85,000 unique holders. More than $4 billion of that volume has settled on-chain, demonstrating institutional demand for tokenized equity infrastructure.
Under the partnership, Payward will serve as the primary settlement layer for Nasdaq equity token transactions in eligible jurisdictions and provide compliance screening through KYC and AML onboarding on the Kraken platform.
Arjun Sethi, co-CEO of Payward and Kraken, said tokenization allows equities to function as "programmable financial instruments" across trading venues. "Today most equities sit inside brokerage systems where their utility is largely limited to directional exposure," Sethi said, adding that tokenization enables stocks to serve as collateral across spot markets, margin trading, derivatives, and financing platforms simultaneously.
The gateway is designed to address liquidity fragmentation across venues by allowing the same equity collateral to support multiple trading strategies across different platforms without requiring isolated reserves at each venue.
Nasdaq expects its equity token design to become operational in H1 2027.
