Kraken to launch over 50 tokenized stocks and ETFs: WSJ

Crypto exchange Kraken will begin offering tokenized versions of major U.S. stocks.

The company informed The Wall Street Journal that the stocks, which include Apple, Tesla, Nvidia, and the SPY ETF, will be accessible to international users in the next few weeks.

The initiative will allow customers outside the U.S. to trade over 50 tokenized stocks and ETFs around the clock using a new product line dubbed “xStocks.”

The tokenized shares will live on the Solana (SOL) blockchain and be backed 1:1 by the actual underlying securities. 

Kraken’s partner, Backed Finance, will purchase and custody the real shares, ensuring the token prices mirror market values. The xStocks will also be redeemable for their cash value.

International users

Kraken said the rollout will target customers in Europe, Latin America, Africa, and Asia, with U.S.-based users excluded due to regulatory restrictions. 

The tokens can eventually be moved to external wallets or used as collateral in decentralized finance (DeFi) applications.

“We’re reducing friction for global investors,” said Kraken co-CEO Arjun Sethi. He noted that overseas investors typically face high fees and long settlement times when accessing U.S. equities through local brokerages.

Tokenized stocks have been tried before. Binance briefly offered similar products in 2021 but halted the service amid regulatory pushback. Kraken says it is working closely with regulators in each jurisdiction to avoid the same fate.

The move comes amid renewed interest in tokenization from major players like BlackRock and Robinhood, as U.S. lawmakers and regulators begin reconsidering the legal frameworks for crypto-based financial products.