Nasdaq Inc. has invested $100 million into Payward Inc., the parent company of the Kraken cryptocurrency exchange. This deal expands the existing partnership between the two firms, which began in March with plans to develop Nasdaq Equity Tokens. The collaboration focuses on integrating these tokens with Payward’s xStocks ecosystem to facilitate the issuance and management of tokenized equities.
The initiative aims to modernize market infrastructure by utilizing blockchain-based smart contracts for corporate actions like dividend distribution and voting. Nasdaq’s Digital Liquidity Networks division will lead the project, focusing on creating continuous market infrastructure. Payward will also implement Nasdaq’s audit technology across its trading venues, covering crypto, futures, options, and equities.
According to Payward Co-CEO Arjun Sethi, the US clearing system processes over $2 trillion in daily stock trades, with clearing houses holding $10 billion to $20 billion in collateral for settlement. Moving to on-chain settlement is intended to eliminate the current waiting periods. The project seeks to update back-end systems to allow existing securities to be recorded on digital ledgers.
The broader industry shift involves Nasdaq, the New York Stock Exchange, and the Depository Trust Co. working to bring stock trading onto blockchain-style systems. The goal is not to replace traditional markets but to enable existing shares and exchange-traded funds to be represented as tokens while maintaining their original tickers, legal rights, and regulatory status.
