Wall Street is Moving on Chain: The Tax Question Behind Tokenized Stocks
The line between traditional finance and digital assets became thinner this week because on September 10th, Nasdaq announced a $100 million investment in Payward. Payward is the parent company of Kraken, and this partnership is focusing on building an infrastructure for tokenized assets. The companies are currently developing Nasdaq Equity Tokens, and they plan to launch them mid 2027.
What is a tokenized stock?
A tokenized stock is a blockchain based equity. Instead of ownership existing within traditional brokerage infrastructure, the tokenization allows for the equities to move through blockchain networks and into compatible wallets. Nasdaq and Payward want to combine these two infrastructures together and provide investors with the same protections they had before in traditional markets. This system is intended to preserve shareholder rights while allowing the assets to operate outside of conventional market hours.
This proposed idea could address the fundamental differences between cryptocurrencies and traditional securities. Crypto operates around the clock, while traditional markets in the United States rely on trading hours and traditional settlement procedures.
How does this affect taxes?
Moving your stock onto a blockchain does not make tax consequences disappear, and the IRS is actively working on addressing the intersection between the two infrastructures. Investors will still need to consider traditional familiar concepts on their 1099, such as capital gains/losses, cost basis, and distributions. The blockchain infrastructure introduces additional questions, like whether or not the basic information for the traditional security will transfer into the blockchain. Another big question is whether or not investors will be able to distinguish the difference between tokens that actually have shareholder rights and tokens that merely just copy the economic activity of the actual asset.
The big shift
Nasdaq says that more than $2 trillion of stock passes through the U.S clearing system every day. Blockchain based settlements could hopefully reduce some of the delays, and lift market-hour restrictions associated with it. The technology underneath investing may change even if the assets remain familiar after processing onto the blockchain.
For taxpayers, accountants, and businesses that operate in digital assets, the future of taxation on cryptocurrencies may not be limited to cryptocurrency. If stocks, bonds, and other traditional assets can move onto blockchain, understanding reporting digital assets will become standard for understanding the future of our financial systems.
September 11, 2026
