Nasdaq Invests in Payward
In a significant move within the cryptocurrency sector, Nasdaq has allocated $100 million into Payward, the company overseeing the crypto exchange Kraken, with a valuation set at $21 billion, as reported by Bloomberg on Thursday citing sources close to the matter. This investment is being facilitated through Nasdaq’s ventures division and builds upon a partnership initiated earlier in March.
Collaboration with Kraken
As part of this collaboration, Kraken is set to introduce Nasdaq’s tokenized stocks on its trading platform, allowing users to trade equities listed on the Nasdaq in tokenized form. These tokens will grant holders the same voting rights typically associated with conventional shares traded on the exchange, distinguishing them from many other tokenized equity products that only provide price exposure without additional entitlements.
Focus on Tokenized Equities
Nasdaq is emphasizing a design that prioritizes issuers, creating a framework to facilitate the trading of tokenized equities across both regulated markets and blockchain platforms through its partnership with Kraken. Currently, Kraken’s business-to-business arm, Payward Services, already provides access to these tokenized equities.
Broader Trends in Financial Institutions
This investment marks Nasdaq’s entry into a broader trend where traditional financial institutions have begun to acquire stakes in cryptocurrency exchanges. Earlier this year, Intercontinental Exchange, which operates the New York Stock Exchange (NYSE), invested in OKX at a valuation of $25 billion, gaining a board position and pledging to integrate tokenized equities into the 120 million accounts on the OKX platform. Similarly, in April, Deutsche Börse invested $200 million for a 1.5% equity stake in Payward.
Future Plans and Valuation
In addition, Nasdaq is reportedly planning to launch its own token in the second quarter of 2024, according to insider information shared with Bloomberg.
Payward’s valuation trajectory has been somewhat unpredictable. The company raised $800 million last November, establishing its value at $20 billion, which it also referenced in an agreement to acquire the derivatives exchange Bitnomial. However, Deutsche Börse’s recent investment implied a lower valuation, closer to $13.3 billion. Payward’s journey to go public has been gradual; it filed a confidential S-1 form last November but postponed its initial public offering in March, coincidentally the same month that Kraken was authorized as the first cryptocurrency business to access the Federal Reserve’s payment system.
