Kraken parent Payward has partnered with Nasdaq to build what the two companies call an "equities transformation gateway," a new infrastructure layer designed to connect regulated tokenized equity markets with permissionless blockchain networks through Kraken's xStocks product, which has already processed more than $25 billion in total transaction volume.
What Happened: Tokenized Equity Gateway
The partnership will use xStocks to power the permissionless infrastructure behind Nasdaq's planned issuer-sponsored equity token design, which is expected to go live in the first half of 2027. More than $4 billion of xStocks volume has been settled on-chain to date, and the product counts over 85,000 unique holders across supported networks.
The gateway is intended to let eligible users move tokenized equities between a regulated, permissioned market environment and open on-chain ecosystems.
Payward will handle KYC and AML onboarding for participants accessing the bridge through Kraken, and will serve as the primary settlement layer for transactions tied to Nasdaq's equity token design during an initial period in jurisdictions where xStocks are already available.
Arjun Sethi, co-CEO of Payward and Kraken, said the effort targets a structural limitation in how equities function today.
"Today most equities sit inside brokerage systems where their utility is largely limited to directional exposure and, in some cases, broker-specific margin arrangements," Sethi said. He added that tokenized equities could instead operate as collateral within unified trading systems supporting spot markets, cross-margin trading, derivatives, perpetual futures and financing environments.
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Why It Matters: Capital Efficiency
Sethi argued the current model leaves capital trapped inside siloed venues, fragmenting liquidity and limiting the potential utility of equity holdings. "With xStocks, our goal is to make equities natively interoperable across trading venues, financial applications and blockchain networks while preserving issuer rights, regulatory protections and price integrity," he said.
The broader thesis here is that tokenized equities are not simply digital wrappers for traditional shares.
Payward is positioning xStocks as collateral that can move across trading, lending and hedging systems under a unified margin framework — a model that maps closely to how capital efficiency already works in crypto derivatives markets.