#What is Nasdaq's new initiative for tokenized equities?
Nasdaq has announced an ambitious plan to introduce a framework for tokenizing public company shares. This innovative initiative aims to uphold legal and regulatory standards while enhancing investor engagement and enabling around-the-clock trading.
To achieve this, Nasdaq is collaborating with Payward, the parent company of Kraken, to develop a gateway that connects both permissioned and permissionless markets for these tokenized equities. This ensures that there is legal equivalence, investor protections, and issuer oversight in the new market structure.
How does tokenization benefit issuers and investors?
The primary goal of this initiative is to provide public companies with more control over their shares when they are in tokenized form. Additionally, it introduces programmable features that modernize shareholder interactions. Key areas of improvement include proxy voting, corporate actions, and governance rights, all designed to empower issuers and facilitate smoother communication with investors.
Nasdaq's President has emphasized how tokenized equity securities can unlock numerous advantages for both investors and issuers alike. The framework is crafted to enhance public companies' presence in the equity market and broaden access to US equity markets for global participants.
What aligns this initiative with regulatory standards?
This new framework builds on a proposal that Nasdaq submitted to the SEC last September. The proposal sought approval for trading equity securities, including issuer-sponsored tokens, in its markets, with the ability to settle through the Depository Trust & Clearing Corporation (DTCC). Furthermore, the program aligns with the SEC’s 2026 Staff Statement on Tokenized Securities, which clarifies that tokenized equities are treated similarly to traditional equity securities under federal law.
The cooperation with Payward aims to expand the equities transformation gateway for clients in various jurisdictions where xStocks currently operates, allowing for a broader international reach beyond the US markets.
Why are tokenized equities important for market infrastructure?
The introduction of tokenized equities is expected to enhance market infrastructure by allowing interoperability between conventional financial systems and blockchain networks. This not only safeguards issuer rights but also maintains price stability, ensuring a robust trading environment.
As stated by the co-CEO of Kraken, for international clients, this initiative will broaden access to public markets that previously had limited availability. For US investors, enhanced collateral efficiency and improved capital mobility will be key advantages across various trading and financing workflows.
When will this program launch?
As Nasdaq continues to develop the token framework, it will actively engage with issuers, transfer agents, regulators, infrastructure operators, and market participants. The exchange anticipates that the program will become functional in the first half of 2027, supported by additional distributed ledger technology services.