Kraken’s parent company Payward has entered talks with BNY — the former Bank of New York Mellon — over a potential partnership spanning six areas, including crypto custody, trading and payments, according to two people familiar with the discussions. No agreement has been reached, and the negotiations remain ongoing, but the scope alone signals how far the wall between Wall Street custody banks and crypto exchanges has eroded.
By David Chen | October 3, 2026
The Hook
According to the two people, who spoke anonymously because the negotiations are private, the proposed arrangement could involve services supplied through Payward Services — the Wyoming-based company’s business-to-business platform for banks, exchanges and asset managers. One of the people said parts of the discussions resemble the infrastructure work included in Payward’s recent agreement with Nasdaq, describing a possible deal that remains under discussion.
For DeFi and exchange watchers, this is the story of the month: the plumbing of traditional finance and the plumbing of crypto markets being bolted together by two of their biggest names. Whether the talks produce a deal or not, they confirm the direction of travel.
Six Areas on the Table
Alongside crypto products and custody, the people identified wealth management, trading, payments and financial infrastructure as possible areas of cooperation. That is a multi-line relationship rather than a single product tie-up:
- Crypto products and custody — the obvious core, pairing BNY’s institutional custody franchise with Payward’s digital-asset operations.
- Trading — Payward’s operations span spot crypto, derivatives, tokenized equities, staking and traditional securities.
- Payments — an area where both companies have been building: Payward has completed acquisitions adding stablecoin payment services, while BNY runs a digital cash program with institutional clients.
- Wealth management — a BNY strength that could route traditional portfolios toward crypto exposure serviced by Payward.
- Financial infrastructure — the layer where Payward’s B2B platform and BNY’s asset servicing and clearing businesses overlap.
The Nasdaq Deal as Template
Payward is not coming to these talks empty-handed. In September, Nasdaq Ventures agreed to invest 100 million USD in the company at a reported valuation of 21 billion USD, citing Bloomberg’s reporting from people familiar with the transaction. The September 10 agreement had three components: the investment, collaboration on Nasdaq Equity Tokens, and a market surveillance agreement across crypto, equities, tokenized equities, futures and options venues. Wells Fargo served as exclusive capital markets adviser.
The planned equity tokens are expected to launch in the second quarter of 2027, connecting with Payward’s xStocks ecosystem. Payward co-CEO Arjun Sethi described the planned infrastructure as “rails that do not close, with shareholder rights intact.” Nasdaq cautioned that the date is an expectation, not a guarantee.
If parts of the BNY discussions echo that infrastructure work, the through-line is clear: Payward positioning itself as the tokenization and crypto-asset engine that established financial institutions plug into, rather than a retail exchange that occasionally courts institutions.
What BNY Brings
BNY, headquartered in New York and listed on the NYSE under ticker BK, provides custody, asset servicing, clearing and wealth management for institutional clients. Its digital cash program already involves institutional clients and financial-market infrastructure providers.
The bank has also started tokenizing deposits. In a January 9 announcement, BNY described creating blockchain records that mirror participating clients’ existing deposit balances, starting with collateral and margin workflows. The system runs on a private, permissioned blockchain while balances continue to appear in the bank’s traditional records for regulatory purposes. ICE’s clearing leadership was quoted in that announcement on preparing for 24-hour trading and potential use of tokenized collateral across its clearinghouses.
Put the two halves together and the logic is almost arithmetic: BNY holds the institutional relationships, regulatory standing and balance sheet; Payward holds the crypto trading, custody, staking and tokenization technology. A partnership covering even part of the six discussed areas would let banks access crypto services without building them, and let crypto firms reach bank-grade clients without becoming banks.
Market Implications
For regular investors, three takeaways:
- Bank-crypto convergence is accelerating. After Anchorage, community-bank lawsuits over OCC crypto charters and now these talks, custody is the battleground where TradFi and crypto meet first.
- Kraken’s institutional arm is the growth story. The Nasdaq investment and the BNY talks both center on Payward Services, not the retail exchange — watch that business for revenue milestones.
- No deal yet. Talks between companies of this size fail often, and both parties have reason to leak favorable framing. Treat this as a signal of intent, not a signed agreement.
The Verdict
A Payward-BNY deal across custody, trading and payments would be among the most significant bank-crypto partnerships to date, and the fact that it is even under discussion tells you how normalized institutional crypto has become. The concrete markers to watch: any joint announcement, regulatory filings referencing the partnership, and whether Payward’s Nasdaq Equity Tokens hit their expected second-quarter 2027 window — the credibility of that timeline will shape how seriously institutions take the next deal. Until something is signed, this is ambition on the record, not business on the books.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
Payward talking custody with BNY would have been unthinkable in 2021. The wall between Wall Street and crypto exchanges is not just eroding, it is being dismantled on purpose.
Six areas of cooperation is a shopping list, not a deal. Until there is a signed agreement this is negotiating pressure on both sides, BNY gets leverage over other custody bidders.
The Nasdaq comparison is the tell. If parts mirror that infrastructure agreement, this is about rails for institutions, not retail. Payward Services becoming the Stripe of bank crypto plumbing would be a bigger story than the partnership itself.
six workstreams is a menu to see which one survives diligence, agreed. but BNY even taking the meetings tells you the custody race with State Street got real enough to lease exchange plumbing
shopping list phase is where most of these die quietly. the nasdaq deal took months from talks to signature, and that was one product, this is six
six areas is a whole due diligence shopping cart. BNY does not enter six workstreams at once unless some of them are already informally running
agreed, nobody opens six workstreams from a cold start. feels like BNY already stress tested one quietly and is now shopping for the rest
Payward already built the infrastructure side of the Nasdaq agreement, so BNY plugging into that stack gives banks crypto rails without building anything in house. that is a faster path than any competitor has
everyone is staring at the custody headline and skipping the wyoming detail. payward services being a b2b platform means bny would not be touching the exchange at all, just the infrastructure layer, which is exactly how the nasdaq deal was shaped too
the wyoming b2b read is the right one but it cuts both ways. if bny is only leasing rails there is no urgency to close anything, which is probably why it is talks across six workstreams and still no agreement. these deals stall for months over exactly the dispute-handling stuff people keep skipping past
the b2b layer point is why this can actually close. bny never touches the exchange, it just leases payward rails, same shape as the nasdaq agreement that already shipped
six workstreams sounds impressive until you remember the nasdaq deal was one workstream and took months. ship custody first, then talk
if a custody bank this old is comfortable plugging an exchange into its rails, the exam teams in washington clearly stopped treating crypto as radioactive
If Payward ends up as the plumbing behind BNYs crypto side that is a better business than chasing retail spreads. The Nasdaq agreement already hinted at this direction.
The digital cash program BNY runs with institutional clients is the part nobody talks about. They have been quietly building this for years.
Custody plus payments plus tokenized equities, they are assembling a full institutional stack. Wonder how Coinbase feels about BNY circling Kraken.
if this lands, coinbase holders should ask why their custody story needs a german bank license while kraken just plugs into BNY. different routes up the same wall
@gmelissa the german license question cuts the other way imo. BaFIN oversight is exactly what lets them pitch EU institutions that would never touch an offshore exchange stack
the pitch works until an institution asks what happens in a dispute. bafin complaint channels versus an offshore entity behind a partnership, that comparison ends fast
the dispute point is underrated. when a bny custodied position and a kraken margin position disagree, who actually wins that argument. that memo does not exist yet
that memo gets written the first time a margin call hits a custodied position, and it will not be pretty for anyone holding the bag
The dispute memo is the sleeper issue in all six workstreams. Payward can promise anything in a BNY deck, but a margin call hitting a custodied position is uncharted legal territory in every jurisdiction.
@Kersti Aun the memo already half exists in the nasdaq agreement. my guess is the dispute section is the last workstream to get drafted precisely because it is the one where talks can still fall apart over
different wall though. bny gets kraken into custody heavy institutions, the bafin route gets coinbase the eu market. neither is wrong, both are expensive
payments rails are the sleeper item here. custody partnerships get announced every quarter, but a bank actually clearing dollar flows for an exchange is the part regulators will chew on for months
payments is where the occ examiners earn their salary. custody is safe-ish, dollar clearing for an exchange is a completely different meeting
payments is the workstream regulators will actually enjoy chewing on. custody they have figured out, dollar clearing for an exchange is where the fun starts
six areas of scope including payments and not one signed line yet. this is a bank leaking talks to test reaction, classic move before they commit to anything
BNY running custody while Payward Services handles the exchange plumbing is actually a sensible split. The bank gets crypto without touching the order book, Kraken gets a 240 year old name on its pitch deck.
two people familiar with the discussions, no agreement reached. translation: somebody wants the market to price this in early so the deal looks inevitable later