Kraken, the well-known US-based cryptocurrency exchange, has announced a partnership with Nasdaq to create tokenized stocks. This initiative aims to bridge conventional capital markets with blockchain-based financial systems.

The initiative is part of a broader movement within the traditional financial sector to modernize its infrastructure. As noted by CryptoPotato, the crypto industry had a significant impact on global markets following recent geopolitical events.

Kraken’s tokenized equity product, xStockz, will enable a permissionless infrastructure layer for Nasdaq’s issuer-sponsored equity tokens. The popularity of tokenized stocks and commodities like Gold and Silver is on the rise, thanks to crypto exchanges that allow 24/7 trading, which is not possible with most traditional platforms.

According to an official release, the collaboration comes as xStocks sees growing adoption, surpassing $25 billion in total transaction volume. Kraken will serve as a distribution partner for these tokenized assets.

Arjun Sethi, the co-CEO of Payward and Kraken, commented:

“Tokenization upgrades market infrastructure at the asset layer by allowing equities to exist as programmable financial instruments that can operate across both regulated capital markets and open blockchain networks. Today most equities sit inside brokerage systems where their utility is largely limited to directional exposure and, in some cases, broker-specific margin arrangements.”

This partnership signifies a shift towards institutionalization in the crypto industry, alongside a notable move towards integrating traditional equities and commodities into the blockchain realm. Kraken’s recent achievement includes becoming the first crypto firm to receive a Fed Master account.