Kraken’s Payward and Franklin Templeton target $30B tokenized equity push

The partnership underscores how traditional finance firms and crypto companies are increasingly joining forces and competing to dominate what many perceive as the next major phase of global markets.

Central to the plan is Payward’s xStocks platform, which the company says has processed over $30 billion in trading volume since its 2023 launch.

Why are traditional finance firms rushing into tokenized assets?

The partnership between Payward, the parent company of Kraken, and Franklin Templeton comes at a time when institutional interest in blockchain-based finance is growing quickly. 

Large investors are no longer viewing tokenization as an experiment. Instead, many firms now see trading, settlement, and asset management as faster and more efficient. 

Tokenization means placing traditional financial assets, such as stocks, bonds, or money market funds, on blockchain networks in digital form.

Proponents say they can reduce costs, enhance transparency, and let markets function 24/7. Through the new partnership, Franklin Templeton will leverage its experience in asset management, while Payward will provide crypto infrastructure, exchange services, custody, and blockchain trading systems. 

The companies said they intend to work together on multiple products, including tokenized equities, institutional liquidity services, custody tools, and yield-generating blockchain investments. 

One major focus will be expanding Payward’s xStocks framework. It allows traditional equity exposure to be represented on blockchain rails, offering investors a more digital-native way to access financial markets. 

The firms also indicated they were actively exploring investment strategies that could eventually be offered directly onchain in tokenized form.

What makes the Payward-Franklin Templeton deal important?

The collaboration is indicative of a broader move within global finance. For years, crypto companies tried to challenge conventional finance from the outside. Now, many of the big players are, in fact, working with major financial institutions to forge partnerships. 

Franklin Templeton has already been involved in blockchain finance for some time via its BENJI platform, a tokenization tool that provides exposure to money market funds. The firm has put itself among the harder-fisted traditional asset managers venturing into digital assets. 

Kraken will also seek to adopt BENJI as part of its institutional activities to enhance liquidity management and capital efficiency. The shift could allow big investors to transfer funds more smoothly from conventional financial products to crypto markets. 

It is also significant in timing, as Kraken has recently expanded further into both the institutional and derivatives markets following its purchase of Bitnomial. That growth reflects the exchange’s desire to compete more directly with big, multi-service financial platforms. 

Arjun Sethi, co-chief executive of Payward and Kraken, added that the companies aim to move towards a future in which the distinction between traditional assets and blockchain infrastructure won’t matter so much. 

In Sethi’s view, the team could underpin “a new class of products” that combine digital-native features with existing investment structures. 

Sandy Kaul, head of digital assets and innovation at Franklin Templeton, added that onchain assets should be more practical and useful for a broader sector of investors.

A growing battle for the future of financial markets

The race to dominate tokenized finance is becoming increasingly crowded. Major asset managers, banks, and crypto exchanges are all trying to establish themselves early as tokenized markets develop.

Supporters of tokenization believe blockchain systems could eventually reshape how stocks, bonds, and other assets are issued and traded globally. Instead of relying on multiple intermediaries and slower settlement systems, blockchain-based assets can potentially move instantly and remain programmable.

That programmability is one of the biggest selling points for firms entering the space. Companies argue that tokenized products can be designed with built-in compliance tools, automated payments, and easier cross-border access.

Still, regulation remains a major factor. Many tokenized products are currently limited to institutional investors because rules surrounding digital securities differ across jurisdictions.

Payward and Franklin Templeton acknowledged that broader retail access will depend on regulatory approval. However, both firms appear confident that demand for blockchain-based financial products will continue to rise.

Their partnership shows that the future of finance may not belong solely to traditional Wall Street firms or crypto-native companies. Instead, the next stage could be driven by alliances that combine institutional trust with blockchain infrastructure.

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