March 9 (Reuters) – Nasdaq on Monday announced it will collaborate with Payward, parent company of cryptocurrency exchange Kraken, to develop tokenization infrastructure, aiming to capitalize on the growing interest in blockchain-based equities. Tokenization is the process of turning financial assets – such as bank deposits, stocks, bonds, funds and even real estate – into […]
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Nasdaq teams up with Kraken to expand tokenization infrastructure
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March 9 (Reuters) – Nasdaq on Monday announced it will collaborate with Payward, parent company of cryptocurrency exchange Kraken, to develop tokenization infrastructure, aiming to capitalize on the growing interest in blockchain-based equities.
Tokenization is the process of turning financial assets – such as bank deposits, stocks, bonds, funds and even real estate – into crypto assets that can be traded on blockchains, which are the ledgers underpinning digital assets.
* In September, the exchange operator sought Securities andExchange Commission approval to allow trading in “eithertraditional digital or tokenized form”. * Institutional adoption of digital asset infrastructure hasadvanced after the passage of the GENIUS Act last year, withmore regulation still being discussed. * In January, NYSE parent Intercontinental Exchange said itwas seeking regulatory approval for a blockchain-based platformto enable 24/7 trading and on-chain settlement of tokenizedsecurities. * Robinhood, Gemini and Kraken have already launchedtokenized stocks in Europe, while Coinbase and startup Dinariare seeking approval for similar products in the U.S. * However, with bitcoin hovering around levels seen beforethe 2024 presidential election victory of Donald Trump,investors continue to be split on the role of cryptocurrenciesin portfolios. * Under the partnership, Nasdaq will use Payward’s xStocks,a tokenization platform, to enable clients to move securitiesfrom institutional trading infrastructure to blockchainnetworks. * Separately, Nasdaq also announced a partnership withGerman exchange operator Boerse Stuttgart’s tokenizationsettlement platform to facilitate trading of blockhain-basedequities across Europe. * Nasdaq said that plans for tokenizing stocks and otherexchange-traded products will focus on corporate actions, proxyvoting and shareholder engagement. * “Tokenization has the potential to unlock the benefits ofan always-on financial ecosystem – enhancing how investorsaccess markets, how issuers engage with shareholders,” said TalCohen, president, Nasdaq.
(Reporting by Pragyan Kalita in Bengaluru; Editing by Vijay Kishore)