Kraken to Introduce Tokenized Equity Trading on Solana for International Clients
Kraken, a prominent crypto exchange, has announced its plan to offer overseas investors the opportunity to trade U.S.-listed stocks through their platform, starting with a partnership with tokenization firm Backed.
This new initiative, encompassing more than 50 U.S.-listed stocks and exchange-traded funds, will be facilitated using the Solana blockchain. The product is presented as xStocks, digital assets that replicate real-world stocks and exchange-traded funds on the blockchain.
Tokenization, the process of representing tangible assets like stocks or bonds as digital assets, will be executed by Backed. The stocks and exchange-traded funds will be represented on Solana using SPL tokens, akin to ERC-20 tokens on Ethereum. These tokenized assets are expected to trade round-the-clock.
Solana was chosen as the first blockchain for xStocks due to its exceptional performance, low latency, and thriving global ecosystem. While Kraken plans to explore tokenized securities on other networks, Solana's capabilities make it an ideal choice for handling large volumes of transactions efficiently.
Mark Greenberg, Kraken's global head of consumer, commented, "We're reimagining equities investing and ushering in a new wave of demand from clients seeking better alternatives to the status quo. Access to traditional U.S. equities remains slow, costly, and restricted."
In April, Kraken began offering U.S.-listed stocks and ETFs to U.S.-based customers. The exchange plans to expand this service to the UK, Europe, and Australia, and is reportedly preparing for an initial public offering this year.
Tokenization has gained support among traditional financial institutions, with BlackRock CEO Larry Fink praising it as the future of markets. Firms like Securitize and FTX have also entered the tokenization space, offering tokenized stocks and even dabbling in tokenized versions of other companies' stocks.
While the footprint of tokenized stocks may be relatively small compared to stablecoins or products like BUIDL, ongoing developments suggest a growing interest in this area. The potential benefits include increased accessibility, efficiency, and borderless engagement with U.S.-listed stocks for international investors.
- Kraken, partnering with tokenization firm Backed, will offer overseas investors the chance to trade U.S.-listed stocks through their platform, utilizing the Solana blockchain and SPL tokens for these digital assets.
- The xStocks product, facilitated by Solana, will replicate real-world stocks and exchange-traded funds on the blockchain, mirroring the performance of their traditional counterparts.
- Tokenization, handling by Backed, will convert tangible assets like stocks and bonds into digital assets on the Solana blockchain, akin to ERC-20 tokens on Ethereum.
- Solana was chosen for xStocks due to its exceptional performance, low latency, and growing global ecosystem, making it ideal for handling large volumes of transactions efficiently.
- Kraken aims to explore tokenized securities on other networks but believes Solana's capabilities make it the perfect choice for handling xStocks.
- This new initiative reflects Kraken's goal to revolutionize equities investing, offering better alternatives to traditional methods that are often slow, costly, and restricted.
- The rising support for tokenization among traditional financial institutions, such as BlackRock, indicates a growing interest in this technology for increasing accessibility, efficiency, and borderless engagement with U.S.-listed stocks for international investors.
