Kraken launches tokenized US stocks for customers outside the US!

Kraken launches tokenized US stocks for customers outside the US!

Kraken, the second largest crypto exchange in the US, is planning an exciting new offering: the tokenization of US stocks to be made available to non-US customers. This initiative aims to offer a wider range of traditional assets through the use of blockchain technology. The products are to be made available under the xStocks program via Backed Finance, which acts as a partner of Kraken.

With this step, Kraken wants to set new standards for trading in tokenized assets. Kraken Co-CEO Arjun Sethi highlights the benefits of tokenization, which not only promotes transparency and decentralization but also democratizes access to investment opportunities for retail investors. What is particularly noteworthy is that the tokenized shares are stored on the Solana blockchain, which is known for its high performance and low latency.

Details about xStocks

The xStocks program will include more than 50 US stocks and ETFs, including well-known names such as Apple, Tesla and Nvidia. Each tokenized asset is backed by physical stocks, providing additional security and stability for users. xStocks gives users 24/7 access to traditional markets, but only in foreign markets to avoid regulatory challenges in the US.

The market capitalization of tokenized real-world assets (RWA) has increased significantly recently. It rose from $15.9 billion on January 3 to $22.7 billion on May 20, an increase of 42.8 percent. Currently, tokenized private loans and US treasuries dominate the market, while equities only account for $373.4 million.

Competitive environment

By launching tokenized US stocks, Kraken could enter into direct competition with larger brokerages like Robinhood, which are also planning similar services. Robinhood is working on its own blockchain for tokenized securities and therefore wants to operate in the same sector. Meanwhile, Kraken plans to build a series of microservices to efficiently deliver products to customers.

The tokenization move is part of a broader strategy by Kraken to drive expansion in the US market. Most recently, Kraken opened access to exchange-traded funds and stock trading for US customers in certain states in April 2023. Interestingly, Binance had already launched a similar initiative in 2021, but it was discontinued due to regulatory issues.

Overall, with this development, Kraken shows its ambitions to establish itself as a technological pioneer in the crypto and traditional financial markets. Backed by Backed Finance and the powerful Solana blockchain, Kraken is well-positioned to inject new life into the global tokenized asset ecosystem.

Cointelegraph reports that Kraken plans to offer trading in tokenized US stocks to non-US customers. You can find more details about this in another article BeInCrypto.