Nasdaq Invests $100 Million in Kraken: The Future of Tokenized Stocks

The world of traditional finance is changing. On September 10, Nasdaq Ventures announced a major move. The company agreed to invest $100 million in Payward. Payward is the parent company of the cryptocurrency exchange Kraken. 

This investment marks a significant step forward for tokenized stocks. It signals that major financial players are taking blockchain technology seriously.

Key Takeaways

• Nasdaq is investing $100 million in Kraken's parent company, Payward.
• The partnership aims to launch Nasdaq Equity Tokens by 2027.
• The deal focuses on 24/7 on-chain trading and better market surveillance.

A Strategic Partnership

This investment is part of a broader partnership expansion. The two companies are working together on the Nasdaq Equity Token framework, also known as NET. They are also adopting a new market surveillance agreement. 

This agreement will see Payward use Nasdaq's surveillance technology across its trading venues. This move ensures safety and transparency in the market.

The NET framework is expected to launch in the second quarter of 2027. It will establish a foundation for how tokenized equities move across different market environments. Nasdaq President Tal Cohen shared his thoughts on the partnership. 

"The next era of market evolution will be defined by how efficiently and seamlessly capital and assets move across the financial system with durable liquidity," Cohen said. 

He added that expanding the relationship with Payward reflects confidence in their role in building this infrastructure.

Read also: $675M AVAX Treasury Could Get Kicked Off Nasdaq!

Why This Matters for Investors

The current stock market has a slow settlement process. Payward Co-CEO Arjun Sethi explained the problem clearly. He noted that over $2 trillion of stock trades run through the U.S. clearing system daily. 

However, buys and sells net down by about 98%. The clearinghouse holds billions of dollars in collateral while waiting a day to settle.

"Cutting that wait from two days to one in 2024 released $3 billion," Sethi said. "On-chain settlement removes the wait." This is where the Nasdaq-Kraken partnership becomes vital. 

The next phase of their collaboration aims to advance Nasdaq Equity Tokens onto rails that do not close. This means Kraken tokenized stocks will be able to trade 24/7. This is a massive change from traditional market hours.

The Growth of Tokenized Assets

The tokenized stock market is growing quickly. According to data from RWA.xyz, the total distributed value of tokenized stocks is now more than $2.9 billion. This represents a 7.4% increase over the past month. This growth shows that investors want more flexible options.

The deal also highlights a trend among traditional exchanges. Nasdaq is not the only major player entering this space. In March, Intercontinental Exchange, which owns the New York Stock Exchange, invested in OKX. 

In April, Deutsche Börse invested $200 million in Payward. These moves show that traditional finance is embracing crypto infrastructure.

Read also: CME Launches Nasdaq Crypto Index Futures Covering BTC, ETH, XRP, SOL, and More

What Payward Gains

Payward will adopt Nasdaq's market surveillance technology. This technology will cover crypto, equities, tokenized equities, futures, and options. This ensures that the new tokenized stocks will have the same level of oversight as traditional stocks.

Furthermore, Kraken will offer tokenized versions of Nasdaq-listed stocks. These tokens will carry the same voting rights as shares traded on the exchange. 

This is a unique feature. Most existing tokenized equity products do not offer voting rights. This makes the Kraken tokenized stocks offering more attractive to serious investors.

Read also: Grayscale Launches Lowest-Fee Hyperliquid Staking ETF HYPG on Nasdaq

The Future of Trading

The investment values Payward at $21 billion. This is a significant increase from previous valuations. It shows confidence in the company's future. The partnership aims to combine Kraken's crypto-native infrastructure with Nasdaq's traditional market expertise.

This collaboration is about more than just technology. It is about creating a more efficient market. By removing the waiting period associated with traditional clearing, capital can move faster. 

This benefits everyone from large institutions to individual traders. The move towards 24/7 on-chain stock trading is no longer a distant dream. It is becoming a reality.

FAQ

What is the Nasdaq investment in Kraken?

Nasdaq Ventures invested $100 million in Payward, the parent company of Kraken. The investment supports the development of tokenized market infrastructure.

What are Nasdaq Equity Tokens (NETs)?

NETs are a new framework for tokenizing equities. They preserve issuer control and existing regulatory frameworks. They are expected to launch in the second quarter of 2027.

How will this affect trading hours?

The partnership aims to move tokenized stocks onto blockchain rails that do not close. This will allow for 24/7 on-chain stock trading.

Do these tokenized stocks have voting rights?

Yes, the tokenized versions of Nasdaq-listed stocks offered by Kraken will carry the same voting rights as traditional shares.

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