Nasdaq (NDAQ) has agreed to invest $100 million in Payward, the parent company of Kraken, through its venture arm. The investment deepens a partnership to build, distribute and trade tokenized stocks, targeting a second-quarter 2027 launch for the tokens.
The investment values Payward at $21 billion, according to Bloomberg, which first reported the deal. It expands a partnership the two firms first announced in March to develop tokenized equities, under which Kraken’s xStocks product would power a permissionless blockchain layer for Nasdaq’s issuer-sponsored equity tokens.
Payward will also adopt Nasdaq’s market surveillance technology across its crypto, equities, tokenized equities, futures and options venues.
Settlement Without the Two-Day Wait
Deutsche Börse paid $200 million for a stake that valued Payward at $13.3 billion in April, the same month Kraken began offering more than 11,000 US stocks and ETFs through its FINRA-regulated brokerage.
The exchange is moving into stocks, derivatives, and other traditional financial products beyond cryptocurrency, CNBC reported. xStocks, its tokenized-equity product, runs on public blockchains including Ethereum and Solana.
“More than $2 trillion of stock trades run through the U.S. clearing system every day. Buys and sells net down by about 98 percent, and the clearing house holds $10 billion to $20 billion of collateral against what is left while it waits a day to settle. Cutting that wait from two days to one in 2024 released $3 billion. Onchain settlement removes the wait,” said Arjun Sethi, Co-CEO of Payward.
Advancing Nasdaq Equity Tokens
Within Nasdaq, the work is led by its Digital Liquidity Networks unit, which builds always-on market infrastructure. The partnership “advances 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.
Nasdaq introduced the equity-token framework earlier this year and said the tokens are designed to keep issuer control and shareholder rights intact. The next phase will develop the global distribution, trading, and post-trade capabilities behind them, the company said.
Holders of tokenized assets do not have outright ownership of the underlying shares, CNBC noted, and what such tokens confer is contested, a gap now playing out in a public dispute between Robinhood and AMC Entertainment over Robinhood’s tokenized AMC shares, which the studio calls a synthetic market that gives economic exposure without shareholder rights.
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Source: https://cryptopotato.com/nasdaq-ventures-to-invest-100m-in-kraken-parent-payward-at-21b-valuation/
