Nasdaq, the U.S. stock exchange, has invested $100 million (approximately 134.4 billion KRW) in Payward, the parent company of global cryptocurrency exchange Kraken, to develop tokenized stock infrastructure. This initiative aims to integrate blockchain technology into existing securities markets, digitizing processes from stock trading to transfer and settlement.
On the 10th (local time), Nasdaq announced through its strategic investment arm, Nasdaq Ventures, a $100 million investment in Payward. The two companies will jointly build the operational and commercial infrastructure for Nasdaq's Equity Tokens (NETs) and expand collaboration in market surveillance.
NETs is designed to allow stocks to be circulated as blockchain-based tokens while maintaining existing shareholder rights and investor protection frameworks. The companies plan to launch NETs by the second quarter of 2027, establishing global distribution, trading, and post-trade processing capabilities. A key focus is connecting traditional markets with Kraken's tokenized stock ecosystem, xStocks, enabling tokenized stocks to move across different market environments.
This investment is significant as it reflects a move by traditional exchanges to integrate blockchain technology into current securities markets rather than treating tokenized stocks as separate entities. The collaboration combines Nasdaq's expertise in market operations, surveillance, and investor protection with Kraken's tokenization and on-chain infrastructure.
Nasdaq aims to extend blockchain applications beyond tokenization to post-trade processes. By applying blockchain to securities transfer, clearing, and settlement after trade execution, the goal is to create a more efficient infrastructure for asset and fund movement. Payward highlighted that on-chain settlement could improve post-trade efficiency, addressing the current requirement for large collateral in U.S. securities post-trade settlement.
Existing investor protection mechanisms will remain intact. Payward plans to integrate Nasdaq's market surveillance technology into its platform, which handles virtual assets, stocks, tokenized stocks, futures, and options. This ensures that blockchain adoption maintains the market integrity and unfair trading monitoring standards required in traditional securities markets.
In South Korea, Nasdaq's approach is expected to serve as a reference for future stock tokenization. The government plans to implement a tokenized securities system in February 2027, initially tokenizing private money market funds (MMFs), bonds, and unlisted stocks for institutional investors. The policy aims to expand tokenization to traditional structured securities like stocks, bonds, and funds.
Listed stocks will not be tokenized immediately but will follow a phased approach after pilot operations. The Financial Services Commission (FSC) plans to conduct pilot tests for tokenized trading in exchange markets, referencing Nasdaq and NYSE's pilot programs, with the Korea Exchange leading the initiative.
A key challenge in South Korea will be determining how to integrate blockchain technology with existing securities market infrastructure. Currently, the Korea Exchange handles trading, while the Korea Securities Depository manages custody, settlement, and rights administration. Introducing tokenization requires detailed design to maintain market stability and investor protection while determining the scope of distributed ledger application.
Tal Cohen, Nasdaq President, stated after the investment announcement, “This collaboration focuses on advancing the Nasdaq Equity Tokens business while preserving the trust, transparency, and integrity of capital markets.” Ajun Sethi, Co-CEO of Payward, added, “The next step is to move Nasdaq Equity Tokens onto 'rails that never close' while maintaining shareholder rights.”
