Nasdaq and Payward, the parent company of crypto exchange Kraken, are jointly developing a so-called Equities Transformation Gateway. This system is designed to make tokenized equities seamlessly transferable between regulated exchanges and open blockchain networks.
Payward handles KYC and AML onboarding through the Kraken platform. At the same time, Nasdaq is announcing its own Equity Token Design. It allows issuers to program ownership rights, corporate governance, and proxy voting directly on the blockchain. Both initiatives are scheduled to go live in the first half of 2027. However, the gateway will be available to users in eligible jurisdictions, but not in the US and the UK.
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How the gateway works
The Equities Transformation Gateway bridges two worlds. On one side stand permissioned, regulated equity markets. On the other, permissionless DeFi ecosystems. Tokenized equities are meant to move between both spheres without losing their legal validity. Nasdaq ensures that token transfers represent real transfers of the underlying securities. Settlement continues to run through the Depository Trust & Clearing Corporation (DTCC). As a result, tokenized and conventional equity shares remain interchangeable on Nasdaq.
Issuers stand at the center of the Equity Token Design. Blockchain entries feed directly into official share registers. The program remains voluntary and is subject to regulatory review. This initiative builds on the SEC Staff Statement on Tokenized Securities from 2026, which treats tokenized equities on equal footing with conventional securities under federal law. Nasdaq had already submitted a corresponding tokenization proposal to the SEC in September 2025.
"Tokenization has the potential to unlock the benefits of an always-on financial ecosystem and to improve how investors access markets and how issuers interact with shareholders." - Tal Cohen, President, Nasdaq
Kraken's xStocks as the foundation
The partnership builds on existing infrastructure. Kraken's tokenized equity product xStocks has reached a total transaction volume of $25 billion since its mid-2025 launch. Of that, $4 billion came from on-chain transactions. More than 85,000 unique holders use the offering across various blockchain networks. On-chain tokenized assets are valued at over $225 million.
Currently, the offering includes more than 70 tokenized equities and ETFs. Each token is backed 1:1 by its respective underlying asset, with fractional shares available from $1. Trading runs 24/5 on Kraken and around the clock directly on-chain. Dividends flow back automatically as additional tokens. Also, no trading fees apply when purchasing with USDG or USD.
In December 2025, Kraken acquired Backed Finance, the Swiss issuer behind xStocks. This deepened the company's vertical integration along the tokenization value chain. Backed Assets (JE) Limited from Jersey remains the token issuer. Distribution runs through Payward Digital Solutions Ltd. (Bermuda) and Payward Europe Digital Solutions (Cyprus), regulated under MiFID II.
"For international clients, this expands access to public markets where traditional distribution has been limited." - Arjun Sethi, Co-CEO, Payward and Kraken
Competition for tokenization infrastructure
The Nasdaq-Kraken deal does not exist in a vacuum. ICE, the operator of the New York Stock Exchange (NYSE), made a strategic investment in crypto exchange OKX at the same time. This creates a direct competitor to the Nasdaq-Kraken alliance. Traditional exchange operators are increasingly positioning themselves in the tokenized asset market.
Meanwhile, Nasdaq is expanding its presence in Europe. On the same day, the exchange operator announced a separate partnership with Seturion, the pan-European settlement platform of the Boerse Stuttgart Group. Nasdaq is connecting its European trading venues with Seturion, initially focusing on structured products. Seturion owns BX Digital, the first FINMA-licensed DLT trading platform in Switzerland. In September 2025, the platform launched with the goal of reducing settlement costs by up to 90 percent. Already in 2024, Seturion was used in ECB blockchain trials for wholesale settlement mechanisms.
Political pressure is growing in Europe as well. Eight EU-regulated digital asset firms warn that the EU is falling behind the US in the tokenization race. According to them, the EU DLT Pilot Regime is too restrictive. In response, the Boerse Stuttgart Group is planning to merge its digital unit with Tradias. Their goal is a European crypto champion with a valuation above 500 million euros.
Kraken's expansion strategy
Kraken is advancing tokenization on multiple fronts. In February 2026, the company expanded xStocks to the 360X platform of Deutsche Boerse Group. Shortly after, the Nasdaq partnership followed. Also in late 2025, Kraken launched the world's first regulated tokenized equity perpetual futures. These offer up to 20x leverage for non-US clients in over 110 countries.
xChange, Kraken's on-chain trading engine, enables direct swaps of more than 70 tokenized equities on Ethereum and Solana. This creates a complete ecosystem from issuance through trading to DeFi integration. Now, the partnership with Nasdaq gives this infrastructure a connection to one of the world's largest exchange operators.
"Tokenization improves market infrastructure at the asset level by enabling equities as interoperable instruments across regulated financial systems and open blockchain networks." - Arjun Sethi, Co-CEO, Payward and Kraken
The operational launch of the Nasdaq Equity Token Program and the Gateway is planned for the first half of 2027. Still, the program remains subject to regulatory review and is voluntary for issuers.
