Nasdaq, the major U.S. stock exchange operator, has made a $100 million strategic investment in Payward, the parent company of crypto exchange Kraken. The two companies have advanced their joint development of "Nasdaq Equity Tokens (NETs)," which they first agreed upon in March 2026, and have now set a commercial launch target of Q2 2027. Nasdaq Ventures, the company's strategic investment arm, provided the funding, with Payward's valuation reaching approximately $21 billion.
Most tokenized stocks previously traded in crypto markets have been derivatives that merely mimic the price movements of underlying assets. What this partnership aims for is not such backdoor financial products, but a legitimate infrastructure overhaul that synchronizes companies' official shareholder registries with distributed ledgers. With issuer rights management and regulatory compliance as non-negotiable prerequisites, a major exchange has begun in earnest to connect the equity market to an instant settlement rail that operates 24/7.
$100 Million Investment and Surveillance Technology: Nasdaq's Deep Dive into Tokenized Stocks
Nasdaq's $100 million investment is an unusually large scale of support for a crypto company from an exchange operator. The investment was handled by Nasdaq Ventures, the company's strategic investment arm, with Wells Fargo serving as Nasdaq's exclusive capital markets advisor for the deal. Within this major funding round valuing the company at approximately $21 billion, Nasdaq has committed capital with a clear aim of infrastructure integration.
Leading this partnership on Nasdaq's side is "Digital Liquidity Networks (DLN)," the company's market business division. DLN is the organization responsible for building always-on market infrastructure that allows capital, assets, and liquidity to move seamlessly around the world. Nasdaq President Tal Cohen emphasized that how efficiently and sustainably capital and assets can circulate within the financial system with continuous liquidity will be the decisive factor in the next evolution of markets. The company views Payward as a critical execution partner for realizing this next-generation infrastructure.
Alongside the expanded partnership, the two companies signed a new market surveillance agreement. Payward will implement Nasdaq's exchange-grade surveillance technology across all of its trading platforms for crypto assets, physical equities, tokenized stocks, futures, and options. The aim is to establish market discipline that makes it easier for institutional investors to participate, by equipping crypto exchanges with the same level of price manipulation detection and compliance capabilities as traditional financial institutions.
Through this capital relationship and the provision of surveillance technology, the two companies are accelerating implementation of "Nasdaq Equity Tokens (NETs)," the concept they announced in March 2026. The commercial rollout target, initially expressed as "first half of 2027," has now been narrowed to "Q2 2027."
From Synthetic Tokens to "Real Shares": An Architecture Directly Linked to Shareholder Registries
Attempts to handle stocks on blockchain are nothing new. However, most tokenized stocks traded in early crypto markets were merely tracker certificates or synthetic stock contracts issued by offshore entities—often in Switzerland—that purchased underlying shares and used them as collateral for issuance. While investors could gain economic exposure to price movements, they could not exercise voting rights at the issuing company's shareholder meetings, nor were they treated as officially registered shareholders.
The design philosophy behind Nasdaq's NETs fundamentally transforms this structure. The company advocates an "issuer-centric" approach. Under NETs, blockchain records are directly synchronized with a company's official Share Registry and transfer agent records.
In this framework, transferring a token means a legal transfer of ownership of the underlying share itself, rather than a claim on delivery of a backing asset. Smart contracts automatically execute dividend distributions, proxy voting, and corporate actions such as mergers and stock splits, preserving investor protections and shareholder rights in a manner fully equivalent to conventional shares.
The technology connecting these on-chain assets to existing markets is the "Equities Transformation Gateway," jointly developed by both companies. The gateway interoperably links Nasdaq's regulated trading infrastructure with Payward's "xStocks" ecosystem. Leveraging Payward's distribution network, which holds over 100 regulatory licenses across more than 190 countries and regions, it provides a foundation for equity assets to move between regulated securities trading environments and open decentralized networks while maintaining price consistency.
Rather than forcibly separating the securities market from existing exchanges, Nasdaq has chosen to build a legitimate bridge to a parallel decentralized network. This aims to curb the proliferation of opaque synthetic tokens circulating outside regulatory boundaries, and instead concentrate liquidity into officially authorized equity tokens.
A $2 Trillion Clearing Network and Over $10 Billion Locked Daily: How On-Chain Settlement Transforms Capital Efficiency
The primary motivation driving Nasdaq and Payward to accelerate stock tokenization is resolving the enormous capital costs hidden behind traditional securities clearing systems.
Payward Co-CEO Arjun Sethi pointed to specific figures illustrating the inefficiencies of the current U.S. equity market. In the United States, more than $2 trillion in stock trades pass through clearing houses every day. While netting processes offsetting intraday buys and sells cancel out approximately 98% of the transaction value, clearing houses must continue locking up between $10 billion and $20 billion in collateral daily to guard against settlement failure risk on the remaining balance until settlement is complete.
This waiting period for settlement represents a direct cost to financial institutions in the form of frozen capital. In 2024, the U.S. market shortened the standard equity settlement period from two business days after trade execution (T+2) to one business day (T+1). According to Sethi, this one-day reduction alone freed up approximately $3 billion in collateral lock-ups across the market.
However, even with T+1, an overnight waiting period before settlement completion remains unavoidable. Weekends and holidays force even longer periods of collateral immobilization.
On-chain settlement is a technology that eliminates this waiting period entirely. When trade execution and ownership transfer occur simultaneously on the blockchain, the need to cover credit risk with collateral over multiple days disappears. The $10 billion to $20 billion locked up daily would be freed instantly, dramatically improving capital efficiency across the market.
Furthermore, on-chain conversion dismantles the very concept of trading hours. Current securities markets open and close according to exchange trading sessions and bank business hours, but what NETs aims for is an "always-on market" where value moves regardless of weekends or late nights. If investors across different time zones worldwide can access liquidity at any time, opportunities for after-hours trading—previously limited to a select few major institutional investors—would become widely available.
Regulatory Alignment and Challenges Toward 2027: Hurdles on the Path to an Always-On Market
However well-designed the infrastructure blueprint may be, efforts to rewrite the foundations of financial markets face formidable regulatory barriers. On this front, Nasdaq has spent the past several years carefully laying groundwork.
In September 2025, Nasdaq filed a rule change request with the U.S. Securities and Exchange Commission (SEC) to allow equity securities, including issuer-centric tokens, to be listed and traded on its market and settled in tokenized form through the Depository Trust & Clearing Corporation (DTCC). Furthermore, in early 2026, SEC staff published a "Staff Statement on Tokenized Securities," clearly stating the view that tokenized stocks are subject to the same regulatory standards and investor protection requirements as conventional shares under federal securities law.
This view has allowed tokenized stocks to move beyond the gray zone unique to crypto assets and establish a foundation for legitimate treatment within existing securities law. The New York Stock Exchange (NYSE) and DTCC itself are also advancing pilots for blockchain-based securities settlement, with major U.S. financial infrastructure companies coordinating their preparations for on-chain migration.
That said, many challenges remain to be resolved before the Q2 2027 commercial launch. First is final SEC approval of the rule change and practical integration with the tokenized settlement infrastructure DTCC is building. Regulatory approval for full-scale operation won't be granted until clearing houses demonstrate the fault tolerance to process trillions of dollars in transactions instantly and without disruption.
Second is the disparity in legal systems across cross-border transactions. When deploying NETs to overseas investors through Payward's xStocks network, compliance with local securities regulations, foreign exchange controls, and tax treaties must be verified country by country. It's highly likely that the initial rollout will be limited to a narrow range of investor profiles and regions.
The partnership between Nasdaq and Payward is not an attempt to bring crypto technology into securities markets from the outside, but rather an effort to embed blockchain as a legitimate plumbing system from the very core of the securities exchange itself. Toward Q2 2027, progress on connectivity testing with DTCC and the SEC's approval decisions will serve as concrete indicators of whether the always-on transformation of equity markets can be realized.