Wall Street and crypto have been circling each other for years. On Monday, they shook hands.

 

Nasdaq and Kraken's parent company Payward announced a partnership to develop what they're calling an equities transformation gateway, a piece of infrastructure designed to let tokenized versions of publicly listed stocks move between the traditional, regulated financial system and the open, permissionless world of decentralized finance. The deal is one of the most significant convergences between a legacy exchange operator and a major crypto platform the industry has seen, and it arrives at a moment when several of the world's biggest exchanges appear to be racing to plant flags in the tokenized securities space.

 

Nasdaq President Tal Cohen said the exchange believes tokenization "has the potential to unlock the benefits of an always-on financial ecosystem" and to improve how investors access markets and how issuers engage with shareholders. The equity token design, which Nasdaq expects to become operational in the first half of 2027, is designed to preserve issuer control, existing regulatory frameworks, and the underlying rights associated with company shares.

 

 

What's Actually Being Built

Nasdaq's equity token design is not just about putting a blockchain wrapper around a stock. The initiative is structured so that blockchain records are integrated directly into the issuer's official share register, meaning a transfer of the token represents an actual transfer of the underlying security itself. Full legal and regulatory equivalence is the goal, not a synthetic approximation of it.

 

Kraken's xStocks framework powers the permissionless side of that equation. Since launching less than a year ago, xStocks has processed more than $25 billion in total transaction volume, with over $4 billion of that settled directly on-chain. More than 85,000 unique holders across supported networks have used the product, which currently covers more than 70 tokenized equities and ETFs, each backed 1:1 by the underlying asset. Fractional shares are available from $1. Trading runs around the clock on-chain, and dividends flow back automatically as additional tokens.

 

Under the partnership, the equities transformation gateway will allow clients in eligible jurisdictions to swap tokenized equities between the regulated, permissioned Nasdaq environment and the permissionless DeFi ecosystem. Payward Services will handle KYC and AML onboarding for participants accessing the gateway. Kraken will serve as the primary settlement layer for Nasdaq equity token transactions for an initial period, in the markets where xStocks are available.

 

It's worth being precise about geography. xStocks are not registered under the U.S. Securities Act and are not available to U.S. persons or in the United Kingdom. The initial rollout targets Europe and other international markets where Payward holds the relevant registrations and licenses.

 

 

The Regulatory Foundation Is Already Laid

None of this is happening in a vacuum. Nasdaq filed a proposal with the SEC in September 2025 that sought to allow tokenized versions of its listed stocks and ETFs to trade alongside traditional shares and settle through the Depository Trust and Clearing Corporation. That proposal argued for working within existing rules rather than around them, a notable contrast to tokenization projects that have tried to carve out space outside traditional regulatory structures.

 

The regulatory environment has also shifted meaningfully. The SEC's 2026 Staff Statement on Tokenized Securities classifies tokenized equities the same as regular equity securities under federal law, giving the Nasdaq initiative a cleaner legal runway than it might have had even a year ago. SEC Chairman Paul Atkins has been publicly supportive of American leadership in digital financial technology, and the commission has asked staff to work with firms on tokenized securities distribution.

 

Nasdaq's equity token design is set up as an issuer-sponsored, voluntary program. Public companies listed on Nasdaq would be able to opt in as the framework develops. The exchange plans to engage issuers, transfer agents, regulators, and market infrastructure providers as the project evolves.

 

 

Kraken's Vertical Integration Play

For Kraken, the Nasdaq partnership is the latest move in what looks increasingly like a deliberate strategy to own the entire tokenized equity stack. In December 2025 the company acquired Backed Finance, the Swiss issuer that sits behind the xStocks product, deepening its vertical integration along the tokenization value chain. In February of this year it expanded xStocks to the 360X platform operated by Deutsche Boerse Group. And in late 2025 Kraken launched what it described as the world's first regulated tokenized equity perpetual futures, offering up to 20x leverage for non-U.S. clients across more than 110 countries.

 

Kraken also became the first crypto company to secure approval for a Federal Reserve master account, a regulatory win that drew criticism from several U.S. banking groups but also marked a genuine shift in how regulators are thinking about the boundary between crypto platforms and the traditional banking system. The company is separately targeting a public listing in 2026.

 

Arjun Sethi, Kraken's Co-CEO, framed the Nasdaq deal in terms of capital efficiency as much as access. His argument is that equities today sit largely frozen inside brokerage systems where their utility is limited to directional exposure and, in some cases, venue-specific margin. Tokenized equities on programmable infrastructure, he suggested, can function as collateral across a much broader set of trading, lending, and hedging environments simultaneously, without the capital fragmentation that comes when each venue requires isolated collateral deposits.

 

"When collateral can move programmatically between systems," Sethi said, "settlement friction decreases and capital can move more dynamically between strategies and markets."

 

 

The Race Is On

The Nasdaq-Kraken announcement does not exist in isolation. It arrived in a week that saw the Intercontinental Exchange, the parent company of the New York Stock Exchange, make a strategic investment in OKX at a reported $25 billion valuation, signing a deal to bring tokenized NYSE-listed stocks and crypto futures to OKX's platform. ICE separately announced development of a new digital trading platform combining the NYSE's Pillar matching engine with blockchain-based post-trade systems. That platform would support 24/7 trading of U.S.-listed equities and ETFs, instant settlement via tokenized capital, and stablecoin-based funding. ICE said it would seek regulatory approvals for the venue, with NYSE-linked tokenized shares targeting availability in the second quarter of 2026.

 

Nasdaq also separately announced a partnership with Seturion, the tokenized settlement platform operated by Boerse Stuttgart Group, to connect its European trading venues to infrastructure supporting trading and settlement of tokenized securities.

 

What's emerging is something that looked improbable even two years ago: a genuine competition among the world's largest exchange operators over who gets to own the infrastructure layer for tokenized securities. The race is less about whether tokenized equities will happen and more about which institutions get to control the plumbing.

 

If the Nasdaq-Kraken infrastructure reaches full operation, the implications for how capital markets function could be substantial. Tokenized equities with 24/7 on-chain settlement would, in theory, compress the settlement cycle that still takes two business days in conventional U.S. equity markets. Shareholders would retain full governance rights, including proxy voting and dividend entitlements, automated through smart contract logic rather than managed through layers of intermediaries.

 

For international retail investors in markets where traditional brokerage distribution is limited or expensive, access to tokenized U.S. equities through a crypto exchange represents a potentially meaningful expansion of the investable universe. Fractional share availability starting at $1 removes one of the practical barriers that has kept some investors out of high-priced stocks.

 

The more speculative scenario, and the one Sethi seems most interested in, is what happens when tokenized equities can be used as collateral across DeFi lending protocols, perpetual futures markets, and other on-chain financial applications. The argument is that programmable collateral is more efficient than static collateral, and that the firms which build the infrastructure to move it across venues will capture a meaningful slice of the value created.

 

There's obviously a long way to go. The Nasdaq equity token design isn't expected to be operational until mid-2027. Regulatory approvals still need to be worked through. Issuer adoption is voluntary and therefore uncertain. The U.S. market itself remains off-limits for xStocks. And building genuine liquidity in tokenized equity markets, as Sethi himself acknowledged, requires more than technology alone.

 

Still, the direction of travel is increasingly clear. The question is no longer whether traditional exchange operators will engage with blockchain-based infrastructure. It's who gets there first, and whose plumbing ends up underneath everyone else's trades.

Kraken Moves Deeper Into Tokenized Equities With Backed Finance Acquisition

Kraken is making a major push into the tokenization market with its agreement to acquire Backed Finance, the company behind the xStocks product line.

This move gives Kraken full control over a growing category of tokenized equities and positions the exchange for rapid expansion as it prepares for a public listing.

 

A Strategic Acquisition With Clear Intent

Backed Finance specializes in issuing tokens tied to real world assets, mainly public company stocks and ETFs. These assets are backed by real shares held in custody, allowing users to hold digital representations of traditional securities inside a blockchain environment.

By bringing Backed Finance in house, Kraken gains control over the entire tokenization stack. Issuance, collateral, custody, compliance, and product architecture will all operate under one roof. This eliminates reliance on an external provider and strengthens Kraken’s ability to innovate and scale. The exchange has been building aggressively in Europe and other global markets, and the acquisition aligns with its larger ambition to make tokenized securities a core part of its ecosystem.

 

Why Kraken Is Doubling Down on Tokenization

Tokenized assets have gained momentum as traders and institutions look for a more flexible way to access traditional financial instruments. The benefit is simple. Stocks can be traded on chain, around the clock, with global reach and fewer barriers.

Kraken’s recent capital raise brought its valuation to roughly twenty billion dollars. The company has been preparing for a public offering targeted for 2026, and expanding into real world asset tokenization helps diversify its revenue streams before going public. Backed Finance already holds meaningful market share in the tokenized equity space, which gives Kraken a strong foundation to build on.

The acquisition formalizes a partnership Kraken has spent the past year expanding. Backed has powered xStocks since launch, supporting products that have now generated more than $5 billion in cumulative trading volume on Kraken. 

 

The Broader Market Context

Interest in real world asset tokenization has surged through 2025, but the sector still faces challenges. Liquidity varies widely across tokenized securities. Some assets trade actively, while others see thin volume. This raises questions about whether tokenization alone can deliver deeper markets.

Regulatory frameworks are also evolving. Tokenized shares do not always offer the same rights as traditional equities, such as voting or regular dividend distribution. As more platforms introduce tokenized stocks, market fragmentation becomes a risk, since liquidity can spread across multiple chains and issuers.

These challenges do not diminish the potential, but they highlight the need for stronger standards, clearer rules, and well capitalized issuers.

 

What This Means for the Future

Kraken’s acquisition signals that tokenized equities are becoming a long term strategic priority rather than a side experiment. If successful, Kraken could set the standard for a hybrid financial model where traditional assets move seamlessly across blockchain infrastructure.

BlackRock executives Larry Fink and Rob Goldstein recently said tokenization could reshape financial markets as profoundly as the early internet reshaped information.

Kraken's users may gain access to more global equities, greater flexibility, fractional ownership, and always available markets. Institutions may find a more programmable way to issue and settle securities. The industry may see a blueprint for bridging regulated markets with decentralized technology.

 

The path will not be simple. Liquidity, compliance, and investor protections will remain central areas of focus. However, Kraken’s move shows that major players believe the future of equities includes both traditional exchanges and blockchain based markets working together.

 

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Bybit Expands Into Real-World Assets with Backed Finance Partnership for Tokenized

 

A new wave of tokenized equity products is reshaping how investors access global markets, and xStocks is leading the charge. Created by Backed Finance in partnership with Bybit and Mantle, xStocks allows tokenized versions of major U.S. company shares such as Nvidia (NVDA), Apple (AAPL), and MicroStrategy (MSTR) to be traded on-chain in a regulated, transparent, and globally accessible format.

Each xStock token is backed one-to-one by the underlying equity, which is held in custody by regulated third-party custodians. This approach ensures full backing while enabling the shares to move seamlessly within decentralized finance (DeFi) ecosystems.

 

How xStocks Works

For every xStock minted, a real-world share of the corresponding company is held by the issuer in custody. These tokens can then be traded 24/7 on platforms such as Bybit and used within DeFi protocols for lending, borrowing, or liquidity provision.

Bybit supports deposits and withdrawals of xStocks through the Mantle Network, which acts as the blockchain infrastructure layer connecting centralized and decentralized platforms. Mantle’s low fees and high performance make it an ideal environment for on-chain trading of real-world assets.

This structure allows investors to gain global exposure to leading U.S. equities without the limitations of traditional brokerage systems or market hours. Tokenized stocks can also be composed into smart contracts, collateral systems, and decentralized trading strategies, creating new opportunities for both traders and developers.

 

Why Tokenized Stocks Matter

The launch of xStocks marks a major step toward convergence between traditional finance (TradFi) and decentralized finance. By tokenizing shares of publicly traded companies and making them available on-chain, the project introduces a host of benefits:

• Global access: Investors from almost any region can gain exposure to U.S. stocks without relying on traditional brokerages.

• Composability: Tokenized stocks can integrate with DeFi platforms, enabling creative use cases such as yield farming or collateralized lending.

• Continuous trading: Unlike traditional markets, xStocks can trade around the clock, while still tracking underlying asset prices through custodial backing and oracle feeds.

• Fractional ownership: Smaller investors can gain access to high-value stocks through fractionalized token units.

This level of accessibility and flexibility represents a meaningful expansion of the global financial system into blockchain-based environments.

 

Key Partnerships Driving xStocks

• Backed Finance serves as the issuer and compliance manager for xStocks, ensuring that each token is fully backed by a corresponding equity share and held under regulated custody.

• Bybit, one of the world’s top crypto exchanges, provides the liquidity, infrastructure, and user base to make tokenized stock trading seamless.

• Mantle Network delivers the blockchain infrastructure that underpins the system, offering a modular Layer 2 framework with high throughput and low transaction costs.

Together, these partners form a complete pipeline for bringing traditional assets onto the blockchain. Shares are securely held, tokenized, and then made accessible through regulated on-chain channels.

 

Use Cases and Early Listings

The initial lineup for xStocks includes a mix of technology and finance leaders such as Nvidia, Apple, Tesla, Coinbase, and MicroStrategy. Each stock is represented by a corresponding xStock token (for example, NV DAX for Nvidia and MSTRX for MicroStrategy).

Holders can store these tokens in self-custody wallets, trade them directly on Bybit, or integrate them into DeFi applications across the Mantle ecosystem. Over time, more equities and potentially ETFs may be added to expand the offering.

 

Regulatory and Market Considerations

While the concept is groundbreaking, tokenized securities carry some caveats:

• No voting or dividend rights: Token holders typically gain economic exposure but not shareholder privileges like voting or direct dividend collection.

• Jurisdictional restrictions: Residents of certain countries, including the United States, may be restricted from purchasing or holding xStocks until further licensing is obtained.

• Price variance risk: During off-market hours, token prices can deviate from the underlying asset price, creating both arbitrage opportunities and liquidity risks.

• Regulatory evolution: The treatment of tokenized stocks varies across jurisdictions, and projects like xStocks will likely face ongoing regulatory review as adoption grows.

Even with these considerations, the model represents a significant advancement toward a future where on-chain representations of real-world assets can coexist with traditional financial infrastructure.

 

A New Era for Real-World Assets

Tokenization of assets like equities, bonds, and commodities has long been viewed as the next frontier for blockchain adoption. Projects such as xStocks demonstrate that this vision is now moving from concept to implementation.

By combining regulatory compliance, on-chain transparency, and cross-border accessibility, xStocks delivers a clear example of how tokenized finance could evolve. The initiative also highlights the growing appetite for real-world assets (RWAs) among DeFi participants, who are increasingly seeking stable, yield-bearing alternatives to purely speculative tokens.

 

Final Thoughts

The xStocks launch represents more than a new trading product. It is part of a broader transformation of financial infrastructure — one that connects traditional equity markets to the programmable, borderless nature of blockchain.

Bybit, Mantle, and Backed Finance are positioning themselves at the intersection of these two worlds. If xStocks succeeds, it could pave the way for widespread tokenization of major assets, potentially redefining how investors trade, store, and leverage real-world value in the digital age.

 

As more institutions explore on-chain settlement, custodial bridges, and tokenized asset offerings, xStocks may be remembered as one of the early milestones that made Wall Street truly interoperable with Web3.

 

Stay Connected

You can stay up to date on all News, Events, and Marketing of Rare Network, including Rare Evo: America’s Premier Blockchain Conference, happening  July 28th-31st, 2026 at The ARIA Resort & Casino, by following our socials on X, LinkedIn, and YouTube.