Nasdaq Invests $100 Million in Kraken Parent Payward

The investment of part of a broader expansion of the partnership between Nasdaq and Payward that will also see the companies continue to advance their work on the Nasdaq Equity Token (NET) framework and adopt a new market surveillance agreement, according to the release.

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The investment will support the continued evolution of tokenized market infrastructure. The NET framework is expected to launch NETs in the second quarter of 2027, part of the establishment of a foundation for how tokenized equities can move across different market environments. The market surveillance agreement will see Payward adopt Nasdaq’s surveillance technology across its portfolio of trading venues, per the release.

“The next era of market evolution will be defined by how efficiently and seamlessly capital and assets move across the financial system with durable liquidity,” Nasdaq President Tal Cohen said in the release. “Expanding our relationship with Payward reflects our conviction that the company can play an important role in building the infrastructure that supports this evolution.”

In Payward’s press release about the expanded partnership, Payward Co-CEO Arjun Sethi said that more than $2 trillion of stock trades run through the U.S. clearing system every day, buys and sells net down by about 98%, and the clearinghouse holds between $10 billion and $20 billion of collateral against what is left while it waits a day to settle.

“Cutting that wait from two days to one in 2024 released $3 billion,” Sethi said. “On-chain settlement removes the wait. The next phase of the collaboration is planned to advance Nasdaq Equity Tokens onto rails that do not close, with shareholder rights intact.”

Payward announced in March that it launched a tokenization-focused partnership with Nasdaq and that the collaboration would see the two companies develop an “equities transformation gateway” joining tokenized equity capital markets with decentralized blockchain networks.

Nasdaq’s equity token design “is a new framework for tokenizing equities that preserves issuer control, existing regulatory frameworks and the underlying rights of company shares,” the March announcement said.