Nasdaq (NASDAQ: NDAQ) announced Thursday that it is expanding its relationship with Payward, the parent company of Kraken, as part of a broader effort to bring tokenized equities into mainstream capital markets infrastructure.
The agreement includes a $100 million investment by Nasdaq Ventures in Payward, continued development of the Nasdaq Equity Token (NET) framework, and a new market-surveillance agreement covering Payward’s trading venues. Nasdaq said it expects NETs to launch in the second quarter of 2027, subject to the necessary regulatory and operational work.
For Nasdaq, the appeal is not simply adding blockchain technology to stock trading. The company is positioning tokenization as a way to make capital markets more continuous, efficient and globally connected while preserving the investor protections, issuer rights and market-integrity standards that underpin traditional exchanges.
What Is a Tokenized Stock?
At its simplest, a tokenized equity is a digital representation of ownership in a company recorded on a blockchain or distributed ledger. The underlying economic exposure can resemble that of a traditional share, but the ownership record and transfer mechanics are handled through blockchain-based infrastructure rather than solely through conventional securities systems.
That distinction matters because tokenization can potentially change how securities are transferred, settled and used as collateral. Proponents argue that blockchain-based securities could support faster settlement, fractional ownership, broader access and more automated handling of functions such as dividends or voting. At the same time, tokenized equities remain securities and still have to operate within applicable regulatory frameworks.
Nasdaq’s approach is particularly notable because it is trying to avoid creating a separate parallel market that sits outside traditional exchange protections. Under its framework, a security could exist in either conventional or tokenized form while preserving the same economic rights and, in Nasdaq’s model, the same issuer protections.
Why Nasdaq Thinks Tokenization Could Improve Markets
One of the biggest potential benefits is settlement efficiency. Today, U.S. equity trades generally settle one business day after execution. Before that settlement occurs, clearing institutions must manage counterparty exposure and require collateral against outstanding obligations. Payward co-CEO Arjun Sethi noted in Thursday’s announcement that more than $2 trillion of stock trades move through the U.S. clearing system each day, with trades netted down by roughly 98% before final settlement.
Moving securities onto blockchain-based rails could reduce the amount of time assets and cash remain in transit between counterparties. In theory, faster or even near-instant settlement could lower collateral requirements, improve capital efficiency and allow investors and institutions to redeploy assets more quickly.
That fits into Nasdaq’s broader vision of always-on market infrastructure — systems capable of moving capital, collateral and securities more continuously across markets instead of being tied entirely to traditional trading and settlement windows. Nasdaq is already moving in that direction elsewhere, including plans to extend trading on the Nasdaq Stock Market toward a 24-hour structure.
Kraken Brings the Crypto Infrastructure
Payward gives Nasdaq an established digital-asset partner. Kraken is one of the largest global cryptocurrency trading platforms, while Payward also operates the infrastructure behind xStocks, a tokenized-equities ecosystem designed to provide blockchain-based exposure to publicly traded stocks.
Earlier this year, Nasdaq and Payward began working together on an equities transformation gateway intended to connect regulated securities infrastructure with digital networks. The goal is to allow tokenized equities to move between traditional, permissioned market systems and blockchain-based environments without stripping away the rights associated with the underlying shares.
Thursday’s $100 million investment deepens that relationship and signals that Nasdaq views the project as more than an experimental blockchain initiative. The companies will now work on the global distribution, trading and post-trade infrastructure needed to support broader adoption of NETs. Payward will also deploy Nasdaq’s surveillance technology across its crypto, equities, tokenized-equities, futures and options venues.
That surveillance agreement is important because one of the central questions surrounding digital-asset markets has been whether blockchain-based trading can offer the same level of transparency and oversight investors expect from regulated securities exchanges. Nasdaq is effectively betting that tokenization will gain broader acceptance if the technology is paired with familiar market controls rather than positioned as a replacement for them.
Tokenization Is Already Moving Into Traditional Finance
The Nasdaq initiative is part of a much larger shift underway across financial markets. Blockchain-based assets were once largely associated with cryptocurrencies, but major financial institutions have increasingly begun experimenting with tokenized versions of traditional assets such as U.S. Treasuries, money-market funds, private credit and securities.
BlackRock’s tokenized U.S. dollar institutional liquidity fund, BUIDL, has been one of the most visible examples. The fund uses blockchain infrastructure to represent ownership interests and facilitate eligible on-chain transfers while continuing to invest primarily in traditional short-term assets such as Treasury bills and repurchase agreements.
The next step is equities. If tokenized stocks can preserve traditional shareholder rights while operating on digital rails, they could potentially allow investors to transfer securities more easily between platforms, use stocks more efficiently as collateral and eventually trade or settle assets across a broader range of hours and jurisdictions.
The Infrastructure May Matter More Than the Token
For investors, it can be tempting to focus on the novelty of owning a stock as a blockchain token. But the more significant change may be happening behind the scenes. Modern equity markets already operate electronically. The potential advantage of tokenization is therefore less about converting a paper certificate into a digital object and more about redesigning the infrastructure used for ownership, settlement, collateral and asset transfers.
Nasdaq’s involvement gives that effort additional credibility because the company already operates some of the core infrastructure underlying global securities markets. Its strategy is not to abandon the existing system, but to create a bridge between conventional capital markets and blockchain-based networks.
If that model works, tokenized equities could gradually become another format in which investors hold and transfer securities rather than an entirely separate asset class.
A 2027 Test for Mainstream Adoption
The planned second-quarter 2027 launch of Nasdaq Equity Tokens will be an important test of whether tokenized equities can move beyond crypto-native platforms and become part of mainstream market infrastructure.
There are still significant challenges. Regulatory requirements remain complex, cybersecurity risks are real, and the industry has not yet settled on common standards for how tokenized securities should move across exchanges, wallets and blockchain networks.
But Nasdaq’s decision to commit $100 million to Payward suggests that one of the world’s largest exchange operators believes the technology has moved beyond the proof-of-concept stage.
The broader question is no longer simply whether stocks can be tokenized. Technically, that has already been demonstrated. The more important question is whether tokenized shares can deliver faster settlement, improved capital efficiency and broader market access without sacrificing the regulatory protections and market integrity investors already expect.
Nasdaq and Payward are now betting that they can.
