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Kraken Introduces Tokenized U.S. Stocks for Global Investors
Kraken, a major cryptocurrency exchange, has announced it will soon offer tokenized versions of popular U.S. stocks, including Apple, Tesla, Nvidia, and the SPY ETF. This new feature will be available to international users within the next few weeks, allowing access to over 50 tokenized stocks and ETFs under a product line called “xStocks.”
What Are Tokenized Stocks?
Tokenized stocks are digital assets that represent traditional securities. In Kraken’s case, these tokenized shares will operate on the Solana blockchain and will be backed 1:1 by actual underlying securities. Kraken’s partner, Backed Finance, will handle the purchase and custody of the real shares, ensuring that token prices reflect market values. Additionally, these tokens will be redeemable for their equivalent cash value.
Who Can Access Kraken’s xStocks?
The rollout is specifically targeting international users in regions such as Europe, Latin America, Africa, and Asia. U.S.-based investors, however, will not have access to this service due to regulatory restrictions. This move aims to reduce barriers for global investors who often encounter high fees and lengthy settlement times when trading U.S. equities via local brokers.
Key Features of xStocks
- Available 24/7 for trading.
- Backed 1:1 by real securities.
- Operates on the Solana blockchain for fast and efficient transactions.
- Tokens can be moved to external wallets or used as collateral in DeFi applications.
“We’re reducing friction for global investors,” said Kraken co-CEO Arjun Sethi.
Regulatory Considerations
Tokenized stocks are not a new concept. Other platforms, such as Binance, have previously offered similar products but faced regulatory challenges, leading to the suspension of those services. Kraken has emphasized its commitment to working closely with regulators in each jurisdiction to ensure compliance and avoid similar setbacks. The exchange aims to provide a streamlined and secure experience for its international users.
Renewed Interest in Tokenization
The launch of xStocks comes at a time when tokenization is gaining momentum. Major financial players, including BlackRock and Robinhood, have shown interest in exploring tokenized assets. Meanwhile, U.S. lawmakers and regulators are revisiting the legal frameworks surrounding crypto-based financial products, signaling potential shifts in the industry.
Kraken’s innovative approach could pave the way for wider adoption of tokenized stocks, offering investors a more accessible and flexible method to participate in the U.S. equities market.
