Nasdaq Tapped Kraken to Tokenize Wall Street Stocks, Here’s What That Means For You

Nasdaq has announced a formal partnership with Payward, the parent company of crypto exchange Kraken, to develop a system for issuing and trading tokenized versions of stocks and other exchange-traded products. The platform is expected to be operational in the first half of 2027, with tokenized shares carrying the same corporate governance rights as ordinary shares, including proxy voting and dividend payments.

What Is Stock Tokenization and Why Does It Matter?

Tokenization is the process of converting a financial asset, such as a stock, bond, or fund, into a digital token that can be traded on a blockchain. A blockchain is a distributed ledger, essentially a shared record-keeping system that is transparent, tamper-resistant, and does not rely on a central intermediary to function.

In Nasdaq's model, a transfer of the token represents a legal transfer of the underlying security itself. That is a meaningful distinction from synthetic equity contracts, which replicate the price movement of a stock without conveying actual ownership. 

Nasdaq is specifically designing its system so that blockchain records connect directly to the issuer's official share registry, maintaining full legal and regulatory equivalence between the tokenized and traditional versions of a share.

The two existing versions of any listed stock, tokenized and conventional, would settle through the Depository Trust and Clearing Corporation (DTCC), the U.S. institution that handles the clearing and settlement of virtually all equity trades in the country. That link keeps the two forms interchangeable.

How Does The Nasdaq and Kraken Partnership Work?

The partnership connects Nasdaq's regulated market infrastructure with Kraken's xStocks platform, a tokenization layer that allows securities to move between institutional trading systems and blockchain networks. The goal is to build what Nasdaq is calling an "equities transformation gateway," a bridge that lets issuers and investors move securities between permissioned financial networks and open, permissionless blockchain networks without losing regulatory protections or price integrity.

Permissioned networks are closed systems where participants are known and vetted, like traditional stock exchanges. Permissionless networks are open blockchains where anyone can participate, like Ethereum. Building a compliant bridge between the two has been one of the central technical challenges of asset tokenization, and this partnership is Nasdaq's direct attempt to solve it.

Kraken will act as a distribution partner. Through the arrangement, one-to-one tokenized versions of Nasdaq-listed shares will be made available to Kraken's customers outside the United States, with a focus on Europe and other international markets.

Arjun Sethi, co-CEO of Payward and Kraken, said the partnership is designed to expand access in markets where traditional distribution has been limited, while also improving collateral efficiency and capital mobility for U.S. customers across trading and financing workflows.

What Corporate Actions Will Be Automated?

One of the specific focuses of the initiative is streamlining corporate actions through blockchain automation. The areas targeted include:

• Proxy voting, allowing shareholders to participate in company decisions directly through the token infrastructure.
• Dividend payments, processed automatically rather than through the current multi-step settlement chain.
• Shareholder engagement, giving public companies more direct tools to communicate with and identify their investors.

“Tokenization has the potential to unlock the benefits of an always-on financial ecosystem – enhancing how investors access markets, how issuers engage with shareholders,” said Tal Cohen, President, Nasdaq. “We believe that public companies should always remain at the center of the equity market ecosystem. This issuer‑sponsored approach for tokenized equity securities is designed to empower public companies and enhance global accessibility to U.S. equity markets.”

How Does This Fit Into the Broader Tokenization Landscape?

In January, Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, sought regulatory approval for a blockchain-based platform to enable 24/7 trading and on-chain settlement of tokenized securities. Last week, ICE also made a strategic investment in crypto exchange OKX, valuing it at $25 billion as part of a deal to offer tokenized stocks and crypto futures.

Robinhood, Gemini, and Kraken have already launched tokenized stocks in Europe. Coinbase and startup Dinari are pursuing similar regulatory approvals in the U.S. Nasdaq has also separately announced a partnership with German exchange operator Boerse Stuttgart's tokenization settlement platform to facilitate trading of blockchain-based equities across Europe.

The regulatory environment has shifted in favor of these products. The SEC's 2026 Staff Statement on Tokenized Securities classifies tokenized equities under the same federal law as regular equity securities, removing a significant area of legal uncertainty. The initiative also builds on a proposal Nasdaq filed with the SEC in September 2025, in which it sought approval to allow tokenized versions of its listed products to trade alongside traditional shares on the exchange.

Conclusion 

Nasdaq's tokenized equity platform, built in partnership with Kraken, is designed to connect regulated U.S. stock markets with open blockchain networks while preserving issuer control, shareholder rights, and settlement integrity through the DTCC. Corporate actions including proxy voting and dividends are in scope for automation. The platform is targeting a first-half 2027 launch, and Nasdaq has confirmed it will engage with regulators, transfer agents, and market participants as the framework develops.

Resources 

1. Press release by Nasdaq: Nasdaq to launch equity token design, putting issuers at the center of tokenization

2. Blog article by Kraken: Payward partners with Nasdaq to develop xStocks-powered gateway connecting permissioned and permissionless tokenized equities markets

3. Report by The WSJ: Tokenized Stocks Are Coming to a Market Near You: Five Things to Know

4. Report by Reuters: NYSE-parent Intercontinental Exchange develops platform for 24/7 tokenized securities trading