Nasdaq Invests $100M in Payward Amid Tokenized Equities Push

Nasdaq's venture arm has invested $100 million in Payward, the parent company of Kraken, at an estimated valuation of $21 billion. This deal marks a significant development in the expansion of tokenized equities and brings Nasdaq closer to its goal of distributing its own tokenized shares outside the United States.

The partnership between Nasdaq and Payward follows similar arrangements with the London Stock Exchange and Deutsche Börse, giving Payward simultaneous ties to three major exchange groups. This has raised concerns about the alignment of incentives between the two companies and potential regulatory implications.

Nasdaq's market surveillance technology will be adopted by Payward across its crypto, equities, tokenized equities, futures, and options venues. While neither company has disclosed the terms of this deal or what Payward will pay for the surveillance product, Nasdaq's president, Tal Cohen, described it as a bet on infrastructure.

Payward's Q2 adjusted revenue reached $508 million, up 17% year-over-year, but platform transaction volume fell 18%. The company has filed a confidential draft S-1 with the SEC and is considering a public listing as an eventual option.