Nasdaq and Kraken partner to launch equity token gateway to increase market liquidity

Nasdaq on Monday announced plans to launch an equity token design, a framework to tokenize public company shares while keeping legal and regulatory integrity, modernizing investor engagement, and enabling always-on trading.

The stock exchange giant has teamed up with Payward, Kraken’s parent company, to create a gateway connecting permissioned and permissionless markets for tokenized equities, ensuring legal equivalence, investor protections, and issuer control.

The initiative aims to give issuers greater control over their shares in tokenized form while introducing programmable features that modernize how companies interact with shareholders on matters including proxy voting, corporate actions, and governance rights.

According to Tal Cohen, Nasdaq’s President, tokenized equity securities could unlock benefits for both investors and issuers. The framework, he said, is designed to empower public companies while broadening global participation in US equity markets.

“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 US equity markets,” Cohen stated.

The move builds on a tokenization proposal Nasdaq filed with the SEC last September, which sought approval for equity securities, including issuer-sponsored tokens, to trade on its markets and settle through the DTCC.

The program aligns with the SEC’s 2026 Staff Statement on Tokenized Securities, which established that tokenized equities receive the same treatment under federal law as traditional equity securities.

The equities transformation gateway developed with Payward will be available to clients in jurisdictions where xStocks currently operates, extending its reach beyond domestic markets.

According to Kraken’s co-CEO Arjun Sethi, tokenized equities enhance the market infrastructure by making them interoperable between traditional financial systems and blockchain networks without compromising issuer rights or price stability.

“For international customers, this expands access to public markets where traditional distribution has been limited. For US customers, it will enable greater collateral efficiency and capital mobility across trading and financing workflows,” Sethi noted.

Nasdaq plans to engage with issuers, transfer agents, regulators, infrastructure operators, and market participants as the token framework develops.

The exchange expects the program to become operational with additional distributed ledger technology services available to issuers starting in the first half of 2027.