US Stocks: Nasdaq teams up with Kraken to expand tokenization infrastructure

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 and Exchange Commission ​approval to allow trading in “either traditional digital or tokenized form”.

* Institutional adoption of digital asset infrastructure has advanced after the passage of ​the GENIUS Act last year, with more regulation ⁠still being ‌discussed.

* In January, NYSE parent Intercontinental Exchange said ​it was ​seeking regulatory approval for a blockchain-based platform to enable ⁠24/7 trading and on-chain settlement of tokenized securities.

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* Robinhood, Gemini and Kraken have already launched tokenized stocks in Europe, while Coinbase and startup Dinari are seeking approval for similar products in the U.S.
* However, with bitcoin hovering around levels seen before the 2024 presidential election victory of Donald Trump, investors continue to be split on the role of cryptocurrencies in portfolios.* Under ‌the partnership, Nasdaq will use Payward’s xStocks, a tokenization platform, to enable clients to move securities from institutional trading ​infrastructure to ​blockchain networks.

* Separately, Nasdaq ⁠also announced a partnership with German exchange operator Boerse Stuttgart’s tokenization settlement platform to facilitate trading of blockhain-based equities across Europe.

* Nasdaq said that plans ​for tokenizing stocks and other exchange-traded products will focus on corporate actions, proxy voting and shareholder engagement.

* “Tokenization has the potential to unlock the benefits of an always-on financial ecosystem – enhancing how investors access markets, how issuers engage with shareholders,” said Tal Cohen, president, Nasdaq.