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Hongji Feng
Author
Hongji Feng
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Key Takeaways:
- Kraken’s move into tokenized equities expands the role of crypto exchanges in delivering traditional financial instruments through decentralized infrastructure.
- Around-the-clock trading may challenge legacy exchanges to revisit fixed-hour models and operational dependencies.
- Institutional engagement with tokenized assets is likely to grow as platforms demonstrate viability through real-time integration of trading, custody, and redemption.
Kraken will launch tokenized versions of over 50 U.S. stocks and exchange-traded funds (ETFs) for non-U.S. users, according to a Wall Street Journal report published on May 22.
The rollout will start with offerings including Apple, Tesla, and Nvidia, and will target investors in Europe, Latin America, Africa, and Asia in the coming weeks.
Today we’re announcing our new partnership with @BackedFi for the launch of xStocks on @Solana 🚀@xStocksFi will offer tokenized versions of U.S.-listed equities, available soon to eligible Kraken clients in select non-U.S. markets.
A new layer of market access, built on… pic.twitter.com/eXUnpHDipF
— Kraken Exchange (@krakenfx) May 22, 2025
The digital assets, branded as “xStocks,” will be issued on the Solana blockchain and backed by underlying shares held by Backed Finance. Each token will be redeemable for the cash value of the corresponding security, a structure intended to maintain price alignment with traditional markets.
The service includes shares of major companies like Apple, Tesla, Nvidia, and ETFs such as SPY and GLD. Kraken said the tokens will trade around the clock, including outside U.S. market hours.
“There’s a lot of friction,” Kraken co-CEO Arjun Sethi said. “It typically involves very high fees and slow settlement times.”
Kraken customers will be able to hold and transfer xStocks like other digital assets. The company said future functionality may include wallet transfers or use as collateral.
The product will not be available to U.S.-based users. Kraken stated that it is engaging with regulators in jurisdictions where the tokens will be offered.
The announcement comes amid broader interest in tokenized securities. The Securities and Exchange Commission (SEC) recently held a roundtable on the topic, while firms such as BlackRock and Robinhood have introduced related proposals.
Kraken Reports $472 Million Q1 Revenue
Kraken reported $472 million in revenue for the first quarter of 2025, according to its latest financial update. Adjusted EBITDA reached $187 million, a 1% increase from the same period last year despite a 7% dip in revenue compared to Q4 2024.
The company cited a 29% year-over-year increase in trading volume and a 26% rise in funded accounts. While trading activity slowed following a strong Q4, the exchange said its user retention remained stable, supported by new tools and onboarding processes introduced in recent months.
The introduction of tokenized equities shows a broader trend to bypass traditional brokerage systems and extend market access through blockchain infrastructure. Around-the-clock trading and instant settlement challenge long-established norms in how stocks are bought and held.
This shift also tests regulatory assumptions. While platforms begin merging digital assets with traditional instruments, questions around custody, settlement, and oversight will become harder to separate from broader market structure debates already underway.
Frequently Asked Questions (FAQs)
If widely adopted, tokenized stocks could serve as collateral in decentralized finance (DeFi) protocols, allowing borrowers to access liquidity without selling core equity positions.
The portability of tokenized assets across wallets and jurisdictions may challenge existing tax frameworks, pushing regulators to reassess reporting obligations for synthetic exposure to foreign equities.
Token holders typically lack voting rights or direct legal claims on corporate actions, raising questions about their standing in cases of shareholder litigation or dividend distribution.
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