Nasdaq Allocates $100M to Kraken's Parent Company Payward, Valuing It at $21 Billion

Key Highlights

• Nasdaq has invested $100 million into Payward, valuing the company at $21 billion.
• Kraken will facilitate the trading of Nasdaq's tokenized stocks, maintaining traditional voting rights.
• This is the third major exchange investment in crypto this year.

Nasdaq has announced a substantial $100 million investment in Payward, the parent company of cryptocurrency exchange Kraken, leading to a valuation of $21 billion. This investment, which marks an expansion of their partnership initiated in March, allows Kraken to feature Nasdaq's tokenized stocks, which will carry the same voting rights as conventional shares.

Distinct from typical tokenized equities that only offer price exposure, Nasdaq’s model emphasizes issuer involvement and aims to bridge regulated markets with blockchain technology. Kraken is already involved in offering such products via its B2B entity, Payward Services.

Growing Investments from Established Exchanges

This investment by Nasdaq reflects a trend among prominent exchange operators delving into the cryptocurrency sector. Earlier this year, the Intercontinental Exchange, which owns the New York Stock Exchange, invested in OKX, elevating its valuation to $25 billion while granting it access to NYSE's tokenized equity markets. Furthermore, Deutsche Börse acquired a 1.5% stake in Payward for $200 million shortly thereafter.

In line with these trends, Nasdaq is also contemplating launching its own token by the second quarter of the upcoming year. The valuation of Payward has seen fluctuations, with a reported $800 million raised at a $20 billion valuation last November. Deutsche Börse’s recent investment suggested a reduced valuation of about $13.3 billion, as calculated by industry sources.

Payward's path towards going public has been cautious; after filing a confidential S-1 in November, it postponed its listing in March, just after Kraken became the first cryptocurrency company integrated with the Federal Reserve's core payment systems.