Tokenized stocks gain traction as Nasdaq, Kraken and DeFi leaders race to reshape equity markets

Criptolog » Coins » Tokenized stocks gain traction as Nasdaq, Kraken and DeFi leaders race to reshape equity markets

The rush to bring traditional shares onto blockchains is moving from experiments to large-scale projects, as stock exchanges, crypto platforms and DeFi protocols all try to define what tokenized equity will look like in practice.

Across the industry, established players such as Nasdaq and the owner of the New York Stock Exchange are rolling out tokenized stock initiatives, while crypto-native firms like Kraken, Ondo Finance and OKX work on the infrastructure and distribution rails that could make 24/7 equity markets a reality.

Nasdaq and Kraken push issuer-backed tokenized shares

Under a multi-year plan, Nasdaq is working with Kraken’s parent company Payward to build a platform for issuing and trading blockchain-based representations of listed stocks and other exchange-traded products. The project, announced in coordinated statements, aims to support what Nasdaq calls “programmable engagement with investors”.

According to the exchange, the new tokens are designed so that token holders enjoy the same legal and regulatory status as conventional shareholders. That includes eligibility for dividends, participation in proxy voting and access to other corporate actions, with the transfer of the token mapped directly to the transfer of the underlying security.

Nasdaq stresses that the initiative is focused on making corporate actions such as dividend payments and proxy voting more efficient by automating parts of the workflow through blockchain technology. The platform is currently slated to go live in the first half of 2027, subject to regulatory approvals and technical readiness.

Kraken will act as a key distribution partner for the venture. Through Payward’s tokenized equity framework, known as xStocks, one‑to‑one tokenized versions of publicly traded company shares are expected to be offered to Kraken customers outside the United States, especially in Europe and other non‑US markets where local rules allow it.

The project builds on a formal proposal Nasdaq filed with the US Securities and Exchange Commission (SEC), seeking permission for tokenized representations of its listed stocks and exchange-traded products to trade alongside their conventional counterparts. In the model outlined to regulators, both the native and tokenized versions would continue to settle via Depository Trust infrastructure to keep them interchangeable.

A new gateway: xStocks as the tokenization rail

In a separate communication, Payward described plans for a joint “equity transformation gateway” built on its xStocks framework. This infrastructure is meant to convert conventional equities into compliant tokenized instruments that can circulate across supported blockchains, while still preserving issuer control and shareholder protections.

The idea is to let investors in eligible jurisdictions around the world trade tokenized versions of US and other public-company stocks via Kraken, even when their local brokers or market infrastructure do not provide direct access. The partners position this “issuer-sponsored” model as a way to modernize equity distribution without breaking the connection to existing securities law.

Tal Cohen, president at Nasdaq, has argued that tokenization could unlock elements of an “always‑on” financial ecosystem, changing how investors reach markets and how issuers interact with owners. The exchange portrays the initiative as an evolution of existing equities infrastructure rather than a parallel, unregulated market.

Arjun Sethi, co‑CEO of Payward and Kraken, frames the collaboration as a way to extend public‑market access in regions where traditional brokerage channels are limited. For US clients, he points to potential efficiency gains around collateral usage and capital mobility in trading and financing workflows, assuming regulators sign off on the proposed architecture.

Wall Street’s broader tokenized equity pivot

The Nasdaq-Kraken effort is unfolding as other major market operators outline their own strategies for tokenized stocks. The Intercontinental Exchange (ICE), parent company of the New York Stock Exchange (NYSE), recently made a strategic investment in crypto exchange OKX that values the venue at around $25 billion and includes plans for new tokenized equity products and crypto derivatives.

Separately, the NYSE has been developing a blockchain-based trading platform for tokenized shares, signaling that the exchange sees real potential in representing equity on distributed ledgers. The ICE-OKX tie‑up is expected to pave the way for users of OKX to trade tokenized and derivative products linked to NYSE‑listed securities as soon as later this year, depending on regulatory conditions.

Nasdaq has also announced a partnership with Boerse Stuttgart Group’s Seturion tokenized settlement platform, aiming to connect its European trading venues with infrastructure optimized for tokenized securities settlement. That move underlines how European venues are also positioning for a future in which equities and other instruments can move seamlessly between regulated markets and blockchain networks.

Beyond individual deals, the momentum reflects a belief among several large players that tokenized stocks could eventually upgrade long-standing market plumbing. The vision centers on faster settlement, improved transparency and the possibility of near 24/7 trading windows that are hard to deliver with legacy systems alone.

Instant settlement: promise and friction for institutions

While tokenized stocks are often associated with instant or near‑instant settlement, that feature is not universally welcomed by large institutions. Many professional traders and brokers are wary of compressing settlement timelines beyond the current T+1 standard in the United States, where trades settle one business day after execution.

Market-structure specialists point out that the existing delay allows firms to net positions, manage intraday funding and optimize collateral. A world where every transaction must be fully pre‑funded and settled in real time could introduce new strains on liquidity, particularly during heavy trading periods such as the market close.

For institutional desks, constantly managing funding around the clock to meet instant settlement requirements could mean higher costs and tighter balance‑sheet constraints. Those pressures might, in turn, reduce liquidity at exactly the moments when markets need it most, or push firms to concentrate activity in venues that provide workable collateral and credit solutions.

Retail investors, by contrast, may find the idea of real‑time settlement and 24/7 access far more appealing. Being able to hold tokenized shares directly in a digital wallet, trade outside standard hours or interact with automated DeFi strategies are features tailored more to individual users than to large institutions with established operational processes.

Analysts note that if substantial retail liquidity migrates to tokenized equity venues, institutional players may eventually feel compelled to follow, regardless of their initial misgivings. Liquidity tends to be self‑reinforcing, and where trading activity concentrates, professional participants typically go.

Fragmentation and governance: what exactly do token holders own?

One concern often raised around tokenized stocks is the risk of market fragmentation if multiple tokenized versions of the same equity emerge on different chains or platforms, each with distinct legal terms or liquidity profiles. That scenario could complicate price discovery and make it harder for investors to understand their actual rights.

In the traditional model, most companies have a single main class of common stock. If the same firm ends up with several tokenized surrogates circulating across networks, not all of which are sponsored by the issuer, investors may struggle to assess which tokens are properly backed and what protections apply in each case.

Industry discussions increasingly revolve around “issuer‑sponsored” approaches, like the Nasdaq-xStocks blueprint, where corporate issuers explicitly support the tokenized instrument and ensure governance, dividends and other rights mirror the underlying share. Proponents argue this path could reduce confusion and align regulators, exchanges and tokenization platforms.

At the same time, the drive to increase accessibility can conflict with the need to enforce geographic restrictions, investor qualifications and other rules. Platforms are experimenting with various models to encode compliance controls directly at the token level, whether through whitelists, smart‑contract gating or integrated KYC/AML frameworks.

How these questions are resolved will influence whether tokenized stocks become a mainstream extension of existing equity markets or remain a niche segment dominated by a handful of specialized providers.

On-chain tokenized equity tops $1 billion in value

Beyond the plans of incumbent exchanges, the tokenized stocks already live on public blockchains have quietly crossed a symbolic threshold. According to data compiled by RWA-focused analytics platforms, the total value of tokenized equities on-chain has surpassed $1 billion, underscoring that this is no longer a purely experimental corner of crypto.

The recent jump in value has been driven in large part by just a few platforms that managed to combine regulatory clarity, distribution reach and deep liquidity. That concentration is shaping the competitive landscape early, even though tokenized equities as a category remain relatively small compared with global equity markets.

Researchers at Foresight Ventures note that the sector’s structure is being defined by those early movers that solved, or at least mitigated, the legal, liquidity and distribution challenges before others did. These advantages make it more difficult for latecomers to gain meaningful traction, even if the overall market is still in a growth phase.

For many investors experimenting with tokenized stocks, the core appeal lies in bridging regulated securities with blockchain-native infrastructure—combining exposure to familiar companies with features like programmable ownership and DeFi composability. But that bridge only works if the connection to the underlying asset is robust and clearly understood.

Ondo Finance and xStocks emerge as early leaders

Within this on‑chain ecosystem, Ondo Finance appears as a dominant player by value. Data from RWA monitors show that Ondo controls close to 58% of the tokenized securities segment, giving it a lead over rivals and positioning it as a core venue for investors seeking on‑chain exposure to real‑world assets.

Ondo has launched a wide range of tokenized instruments, including positions linked to large public companies and financial firms. By locking in significant pools of liquidity from the outset, the platform has become a primary destination for users looking to trade or hold tokenized versions of mainstream assets.

Across its product set, Ondo has reportedly tokenized thousands of equity-related instruments, effectively turning a broad swath of traditional finance into digitally tradable assets. That scale, combined with active secondary markets, helps explain why such a large share of the overall on‑chain tokenized stock value now sits on its rails.

Running just behind, Payward’s xStocks—also central to the Nasdaq partnership—accounts for nearly a quarter of the tokenized equities market by some estimates. Together, Ondo and xStocks control a substantial majority of total on‑chain tokenized stock value, giving the segment a duopoly-like character at this stage.

Analysts see this concentration as a product of early architectural bets: both platforms committed early to specific approaches to regulation, liquidity design and how their tokenized instruments would integrate with DeFi, and then built deeply around those choices.

Tokenized stocks plug into major exchanges and DeFi

Ondo’s products have steadily moved into the mainstream crypto trading environment. A notable step was the listing of multiple Ondo-backed tokenized stocks on Binance, including tickers such as NVDAon, GOOGLon, TSLAon and several others referencing major equities and ETFs.

To encourage adoption, Binance launched a promotional trading competition tied to tokenized gold-related products connected to Ondo’s lineup, offering sizable rewards to participants during a defined contest window. The push is intended to normalize tokenized securities trading for crypto-native users who are already comfortable with perpetuals and spot markets.

Alongside centralized exchanges, tokenized equity products are being integrated into DeFi tools and aggregators. Partnerships with routing platforms like 1inch have helped direct substantial volume into tokenized stock and ETF pools, illustrating how these instruments can participate in the broader on‑chain liquidity fabric rather than trading in isolation.

For platforms like Ondo, being accessible through both centralized venues and DeFi aggregators helps reinforce a liquidity flywheel: higher volumes attract more market makers, which in turn improves spreads and execution, making the products more attractive for additional users.

Payward’s disclosure that xStocks has already processed tens of billions of dollars in total trading volume, with several billion settled directly on‑chain and tens of thousands of unique on‑chain holders, highlights how quickly these rails can scale once they reach a critical mass of users and integrations.

Tokenized Treasuries and RWAs build a wider foundation

The evolution of tokenized stocks sits within a broader surge of real‑world asset (RWA) tokenization. Excluding stablecoins, the total value of RWAs on-chain has climbed into the tens of billions of dollars, encompassing everything from US Treasuries and money‑market funds to credit products and real estate structures.

Tokenized US government bonds stand out as one of the most mature segments, with on‑chain balances climbing beyond the $10 billion mark and continuing higher. The steady growth in this area suggests that investors are increasingly comfortable holding yield‑bearing traditional instruments in token form.

For many participants, tokenized Treasuries and bond funds serve as a kind of “base layer” for on‑chain capital markets, providing relatively stable collateral and a reference point for risk‑free yields. Tokenized stocks, which are inherently more volatile, can then be layered on top as part of a broader portfolio strategy.

This progression—from cash‑like instruments to fixed income and now equities—indicates that RWA tokenization is moving beyond early experiments and starting to resemble a structured ecosystem with its own hierarchies and dominant players.

However, as more asset classes migrate on-chain, authorities and market participants are paying closer attention to issues like custody, disclosure standards and how on‑chain positions map to off‑chain legal claims, all of which will influence how far and how fast tokenized equities can grow.

Market structure, competition and the road ahead

Observers have noticed a recurring pattern across several DeFi and RWA categories: revenues and activity tend to gravitate toward the top two platforms in each vertical. The tokenized equity space appears to be following that script, with Ondo and xStocks soaking up the majority of value and volume so far.

Similar dynamics have been documented in stablecoins, derivatives and decentralized exchanges, where once a small number of protocols accumulate sufficient liquidity and users, network effects make it tough for newcomers to catch up. Tokenized stocks may be no exception, especially given the regulatory and infrastructure hurdles that new entrants must overcome.

That concentration could spark future debates about competition, access and standards. Smaller platforms might experiment with more open or experimental models, while the largest venues prioritize regulatory alignment and institutional compatibility. How those trade‑offs play out will shape which models ultimately gain traction with different types of investors.

At the same time, institutional hesitancy around instant settlement and funding frictions suggests that, at least initially, retail and international users may drive adoption of tokenized stocks more than large asset managers or banks. If liquidity becomes deep enough, those institutions may join in later, but they are unlikely to abandon existing processes overnight.

Put together, the rise of tokenized stocks reflects a market trying to reconcile legacy rules and infrastructure with the possibilities of programmable assets. The collaborations between exchanges like Nasdaq and NYSE’s parent, crypto platforms such as Kraken, Ondo and OKX, and DeFi tools gradually connecting these worlds, all point to a future in which equities can move more flexibly across networks without severing their legal roots in traditional markets.