xStocks will power the permissionless infrastructure layer supporting Nasdaq’s issuer-sponsored equity tokens, enabling transfers seamlessly between regulated capital markets and decentralized blockchain ecosystems in eligible jurisdictions

Payward, the developer of the xStocks tokenized equities framework and parent company of global crypto platform Kraken, today announced a partnership with Nasdaq to develop next-generation infrastructure connecting tokenized equity capital markets with decentralized blockchain networks.

The initiative will build on the growing adoption of xStocks, which provide tokenized exposure to publicly traded equities across blockchain ecosystems. Since launching less than a year ago, xStocks have surpassed $25 billion in total transaction volume, including more than $4 billion settled on-chain, with over 85,000 unique holders across supported networks.

The collaboration will support the upcoming Nasdaq equity token design, a new approach to tokenizing equities preserves control, existing regulatory frameworks, and the underlying rights associated with company shares.

Both organizations believe tokenization has the potential to transform capital markets, modernizing how securities are traded and settled while enabling greater global access, programmability, and operational efficiency across financial infrastructure.

“Tokenization upgrades market infrastructure at the asset layer by allowing equities to exist as programmable financial instruments that can operate across both regulated capital markets and open blockchain networks. Today most equities sit inside brokerage systems where their utility is largely limited to directional exposure and in some cases broker specific margin arrangements. That structure fragments liquidity across venues and leaves a meaningful amount of capital static relative to its potential utility. 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,” said Arjun Sethi, Co-CEO of Payward and Kraken.

Building the Infrastructure for Tokenized Equity Markets

As part of the partnership, Payward and Nasdaq will develop an equities transformation gateway, powered by the xStocks framework, designed to connect regulated, permissioned equity markets with permissionless decentralized financial networks in jurisdictions where xStocks are available.

Within this architecture, the xStocks framework will serve as the infrastructure layer powering the permissionless ecosystem, enabling tokenized equities to interact with open blockchain networks while remaining aligned with the underlying securities traded within regulated markets.

The gateway will allow clients in eligible jurisdictions to seamlessly swap tokenized equities between a regulated, permissioned market environment and the permissionless DeFi ecosystem, enabling assets to move fluidly between institutional trading infrastructure and global on-chain financial networks.

Connecting Regulated Markets with On-Chain Financial Networks

To support the integrity of the ecosystem, Payward Services will provide KYC and AML onboarding tokenized equities through the Kraken platform, ensuring participants accessing the gateway between regulated permissioned equity markets and the permissionless decentralized ecosystem meet applicable compliance requirements in relevant jurisdictions.

In addition, in eligible jurisdictions where clients can trade xStocks today, Payward will serve as the primary and foundational settlement layer for Nasdaq equity token design transactions for an initial period, providing the infrastructure necessary to enable secure and efficient tokenized equity settlement across connected networks.

By connecting Nasdaq’s market infrastructure with the xStocks ecosystem, the gateway is designed to create interoperability between institutional trading environments and decentralized networks. This architecture allows equity securities to move fluidly between regulated capital markets and global onchain networks, while preserving issuer rights, regulatory compliance, and price integrity.

The equities transformation gateway will be available to clients in jurisdictions where xStocks are available and where Payward is appropriately registered, licensed, and approved to offer such.*

Sethi added:

“Bringing equities onto programmable infrastructure expands how they can function within a portfolio. Instead of simply representing exposure to a company, tokenized equities can operate as collateral within unified trading systems that support spot markets, cross margin trading derivatives, perpetual futures and financing environments. In traditional systems portfolio capital efficiency is constrained because collateral cannot move freely between venues and products. If collateral is represented as C and gross market exposure as E then portfolio utilization can be expressed as:
U = E / C

In fragmented systems U is artificially capped because each venue requires isolated collateral. When assets become interoperable across markets the same base collateral C can support multiple strategies simultaneously and effective exposure becomes the sum of all positions:
E_total = Σ E_i

This increases capital utilization across trading environments while maintaining risk constraints enforced by a unified real time margin framework.

For international customers tokenized equities expand access to public markets in regions where traditional brokerage distribution is limited or operationally complex. For customers operating within more developed financial markets the opportunity is capital efficiency allowing equity collateral to participate more fluidly across trading lending and hedging strategies within a shared liquidity and risk framework. When collateral can move programmatically between systems, settlement friction decreases and capital can move more dynamically between strategies and markets.”

As tokenized assets continue to expand across blockchain ecosystems, Payward and its partners aim to establish infrastructure that enables regulated securities to interact with decentralized markets in a secure and interoperable way.

Nasdaq expects its Nasdaq equity tokens design and related distributed ledger technology (DLT)-based services to become operational beginning in H1 2027.

Sethi concluded:

“Our partnership with Nasdaq is important because tokenization alone does not create markets. Markets require liquidity risk management and reliable infrastructure. By combining Nasdaq’s leadership in regulated equity markets with Payward’s digital asset infrastructure and Kraken’s global trading platform we are helping build the liquidity layer risk engine and financial applications that allow tokenized equities to function within a more global continuous and capital efficient financial system.”