Nasdaq invests $100M in Kraken’s parent as tokenized equities expand — Can liquidity deepen?

Traditional finance is moving closer to blockchain markets, with Nasdaq reportedly investing $100 million in Kraken’s parent, Payward, valued at $21 billion.

This investment will turn Nasdaq’s previously announced partnership with Kraken from a partnership to a financial commitment.

This means that Nasdaq sees tokenized equities as a possible growth market, rather than a small crypto experiment. Together, both firms are planning the development of on-chain stock trading, settlement, and storage solutions.

The two firms bring different aspects to their new relationship. On one hand, Nasdaq brings its years of experience operating within regulated markets. Conversely, Kraken brings its expertise in providing crypto trading systems and custody solutions.

This combined entity should help reduce entry barriers to tokenized markets for institutions. However, funding alone does not guarantee adoption.

Instead, successful adoption will depend on attracting issuers, meeting regulatory rules, and generating meaningful trading volume.

That investment will add to the weight of a partnership that has been established based on Nasdaq’s issuer-led tokenization model. Announced in March, the plan links Nasdaq’s regulated systems with Kraken’s xStocks infrastructure through an Equities Transformation Gateway (ETG).

In this process, issuers would maintain control over their securities. And yet, the rights associated with those tokens would be identical to those of a share of common stock.

The blockchain records would connect directly with official shareholder registers, protecting governance, voting, and corporate actions.

The ETG will enable Nasdaq to connect its systems to Kraken’s xStocks. This will allow issuers to continue to have control over the equity they issue. However, when ownership is transferred or other events occur that require voting or corporate action, the rights associated with ownership will be preserved.

If launched in H1 2027, the gateway could widen access and deepen liquidity. However, success depends on regulatory approval, issuer participation, and reliable settlement across both market systems.

Meanwhile, even with Nasdaq’s backing, the gateway cannot deepen tokenized equity markets unless investors can access it widely. xStocks serves more than 110 markets, but restrictions include the U.S., UK, Canada, and Australia.

Losing these major capital markets reduces available capital, which leaves trading activity spread across smaller pools. This will keep spreads wide and prices less reliable, even as total tokenized equity value approaches $2.9 billion.

Different securities and custody rules also make expansion slower and more expensive. Nasdaq’s protection of ownership and voting rights could ease institutional concerns.

However, real progress after the H1 2027 launch requires steady capital from brokers and asset managers. Without that demand, better infrastructure will change little.

Final Summary

• Nasdaq has invested $100 million in Kraken’s parent to support tokenized stocks.
• Wider access and stronger trading activity will determine whether the project succeeds or not.