What You Need to Know:
- Kraken is set to provide round-the-clock trading of tokenized shares for over 50 U.S. stocks and ETFs, including key players like Nvidia and Tesla.
- These xStocks tokens will be issued on the Solana blockchain and represent actual shares secured by Backed Finance, allowing for a 1:1 cash redemption.
- This strategy positions Kraken as the pioneer exchange to successfully introduce tokenized U.S. equities after a previous attempt by Binance faltered in 2021.
Kraken is gearing up to offer tokenized shares of major firms like Nvidia, Apple, and Tesla. According to a report by the Wall Street Journal, this will include over 50 other U.S. stocks and exchange-traded funds (ETFs).
These tokens, known as xStocks, will be traded globally 24/7 on the Solana blockchain, along with popular ETFs such as the SPDR S&P 500 ETF (SPY) and SPDR Gold Shares (GLD).
The underlying shares are held by Backed Finance and are redeemable for their cash equivalents. Kraken’s earlier announcement indicated the initial release of 11,000 U.S.-listed stocks and ETFs through Kraken Securities, starting with ten U.S. states.
This expansion will enable non-U.S. customers in regions like Europe, Latin America, Africa, and Asia to access these tokenized products.
Kraken’s entry into this space directly challenges platforms such as Robinhood and makes it the first to successfully offer tokenized shares of principal U.S. stocks. Binance’s previous attempt to launch such stocks was eventually scrapped due to regulatory challenges.
A spokesperson from Kraken confirmed to the Wall Street Journal that the exchange is working closely with regulators to ensure the legality of xStocks in varying jurisdictions.
Tokenization, which converts physical assets into blockchain-based tokens, is gaining traction in the crypto world, with numerous firms like Ondo Finance, BlackRock, and Franklin Templeton leading the way, contributing to a tokenization market cap of approximately $65 billion as of May.
