Nasdaq invests $100 million in crypto company Kraken Payward

Nasdaq has agreed to invest $100 million in Payward, the parent company of Kraken, through its venture capital subsidiary. The investment deepens the partnership to build, distribute, and trade tokenized equities, with the aim of launching tokens in the second quarter of 2027.

According to Bloomberg, which first reported on the deal, the investment values Payward at $21 billion. It expands the partnership that the two companies first announced in March for the development of tokenized equities, under which Kraken’s xStocks product would power the blockchain layer for Nasdaq’s issuer-sponsored stock tokens.

Payward will also adopt Nasdaq’s market surveillance technology for its cryptocurrencies, equities, tokenized equities, futures trading transactions, and options.

Settlement without a two-day wait

Deutsche Börse paid $200 million in April for a stake that valued Payward at $13.3 billion, the same month that Kraken began offering more than 11,000 U.S. stocks and ETFs through its FINRA-regulated brokerage.

Kraken has been in the process of entering the equities, derivatives, and other traditional financial products sectors beyond cryptocurrencies for some time. xStocks, a tokenized equity product, operates on public blockchains, including Ethereum and Solana.

– More than $2 trillion in equity trades pass through the U.S. clearing system every day. Net buying and selling has fallen by about 98 percent, and the clearinghouse holds $10 to $20 billion in collateral for what remains while waiting for the settlement day. Reducing that wait from two days to one in 2024 freed up $3 billion. Settlement via blockchain eliminates the wait – said Arjun Sethi, co-CEO of Payward.

Advancement of Nasdaq Equity tokens

Within Nasdaq, the work is led by its Digital Liquidity Networks unit, which is building a continuously available market infrastructure.

– The partnership enhances our work on Nasdaq Equity tokens and helps build a more connected financial system while preserving the trust, transparency, and integrity that underpin capital formation – said Tal Cohen, president of Nasdaq.

Earlier this year, Nasdaq introduced a framework for proprietary tokens and stated that the tokens are designed to preserve issuer control and shareholder rights. The next phase will develop global distribution, trading, and post-trade capabilities behind them, the company stated.