Summary
- Nasdaq has committed $100 million to Payward, the parent company of Kraken, which is now valued at $21 billion.
- Kraken will enable the trading of Nasdaq's tokenized stocks, which will offer the same voting rights as traditional shares.
- This marks the third instance this year of a major exchange operator investing in a cryptocurrency exchange.
In a significant move, Nasdaq is investing $100 million into Payward, the parent company of the cryptocurrency exchange Kraken, resulting in a valuation of $21 billion, as reported by Bloomberg on Thursday, citing knowledgeable sources.
The investment is part of a partnership that began in March, and it allows Kraken to distribute Nasdaq's tokenized stocks on its platform. These tokenized stocks will provide customers with equity from Nasdaq in token form, retaining the same voting rights as shares available on the exchange.
Unlike most tokenized equity offerings that merely provide price exposure, Nasdaq's approach prioritizes issuers and aims to facilitate the transfer of tokenized equities between regulated markets and blockchain environments. Kraken is already offering these products through its business-to-business division, Payward Services.
Exchange Operators Expanding Their Reach
Nasdaq joins a growing list of established exchange operators investing in cryptocurrency exchanges this year. Earlier, the Intercontinental Exchange, which owns the New York Stock Exchange, made an investment in OKX in March, valuing the exchange at $25 billion and gaining a board seat while also opening NYSE's tokenized equities markets to OKX's extensive user base. Additionally, Deutsche Börse acquired a 1.5% stake in Payward for $200 million the following month.
According to sources cited by Bloomberg, Nasdaq is also planning to launch its own token in the second quarter of next year.
Throughout these developments, Payward's valuation has fluctuated. It secured $800 million at a $20 billion valuation last November and maintained that figure in April when it agreed to acquire the derivatives exchange Bitnomial. However, Deutsche Börse's investment implied a valuation of approximately $13.3 billion, according to Bloomberg calculations.
Payward's journey toward public markets has been gradual. The company filed a confidential S-1 in November but postponed its listing in March, coinciding with Kraken's achievement of becoming the first cryptocurrency firm to gain access to the Federal Reserve's core payment systems.