Key Takeaways:
- The parent company of crypto exchange Kraken is getting a $100 million investment from Nasdaq Ventures in the company’s tokenized-equity program.
- Both Nasdaq and Payward are aiming to introduce blockchain-based replicas of publicly-traded stocks in the second quarter of 2027 in the form of their Nasdaq Equity Tokens.
- With Kraken’s expansion into multi-asset trading, Payward will roll out Nasdaq’s market-surveillance technology on its crypto trading and tokenized-equity trading venues.
Nasdaq is putting serious capital behind the idea that blockchain can become part of the infrastructure supporting public-market assets. Its $100 million investment in Payward marks a deeper connection between traditional market infrastructure and one of crypto’s largest trading platforms.
Nasdaq Expands its Crypto Partnership
The investment will be made via Nasdaq Ventures, Nasdaq’s venture capital arm, to enable the infrastructure to be built for distributing and trading tokenized equities.
Nasdaq Equity Tokens (NETs) are representations of publicly traded securities that are implemented on blockchain networks. The companies predict the products will hit the market in the second quarter of 2027.
The new agreement follows an earlier announcement of an agreement for testing Nasdaq Equity Tokens. The next phase will be devoted to the infrastructure required to spread and sell the assets, as well as research into market surveillance technology to help make the new trading system work.
The agreement will push a traditional exchange operator into the blockchain financial system. Nasdaq is trying to lead the way to a market structure within which stocks may be traded on blockchain networks, in addition to the existing financial systems.
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Kraken Pushes beyond Crypto
Payward is getting an agreement as Kraken is diversifying from cryptocurrencies and is shifting its focus to a larger multi-asset trading platform.
The company will be expanding its business into stocks, derivatives and traditional financial products, while continuing in its crypto business. It has a good synergy with Nasdaq, which is providing the link between this expansion and existing financial-market infrastructure.
In addition, Payward will implement Nasdaq’s market-surveillance technology on its trading venues. The technology will include crypto and tokenized equities and other asset classes related to the company’s overall trading policy.
The move is important because tokenized stocks allow for questions to be raised beyond merely placing an asset on the blockchain. Not all tokens are a representation of a true asset, and the structure and rights of each token is a significant factor in the market.
The Tokenized Stock Debate
A recent controversy between Robinhood and AMC showed just how controversial token stocks are. Tokenized versions of its shares could present the economic exposure without granting actual shareholder rights, AMC said. Robinhood, on the other hand, said it has the capacity to create and provide financial products that mention publicly traded stocks.
The debate is another wrinkle to Nasdaq/Payward’s project. But the big question now is not whether stocks could be represented on blockchain platforms, but how they will link to trading platforms, regulation and investor rights.
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