Cryptocurrency exchange Kraken is trying to change the way that traders around the world access and interact with U.S. equities, through the launch of trading in tokenised versions of popular US stocks and ETFs.
This initiative. which has been developed in partnership with Backed Finance or Backed.FI, and which leverages the Solana blockchain, introduces a new product line to Kraken Users called xStocks, which initially will only be available to clients in select non-U.S. markets.
What will xStocks offer?
Kraken’s new offering allows users to purchase and trade digital tokens that represent ownership in well-known U.S.-listed companies such as Apple, Tesla, and Nvidia, as well as major ETFs.
These tokens, which are issued as SPL tokens on the Solana blockchain and which are fully backed 1:1 by the underlying securities they are over, that are in turn held in custody by Backed Finance.
The tokens can be traded both on Kraken’s platform and directly on-chain, through compatible wallets, providing flexibility and accessibility that traditional brokerage accounts can’t offer right now.
Why has Kraken launched xStocks?
This move is part of a broader strategy to bridge the gap between traditional financial markets, or TradFi and blockchain and Web3.0 technologies, which are often referred to as DeFi or Decentralised Finance.
In choosing Solana, Kraken should benefit from a blockchain that is known for its high speed, low transaction costs, and robust ecosystem, making it suitable for bringing equities trading to a global, online audience.
Analytics website Cryptorank.IO notes that Solana recently enjoyed a whole year without downtime on its network/blockchain and that the problems that dogged the platform in 2022 now look to be well behind it.
That said, the infrastructure is not infallible. In January 2025, intense demand for the TRUMP and MELANIA meme coins saw as many as 5.0 million traders trying to transact over the system simultaneously.
Which created pinch points around wallets, validators and other tools in the Solana ecosystem.
Though given that Kraken will offer a range of tokenised equities, it seems unlikely that demand for a single name, tokenised equity, would ever be that concentrated.
What are the benefits of tokenised equity trading to end users?
24/7 Trading:
Unlike conventional stock markets, which operate during limited hours, xStocks can be traded at any time, offering continuous access to U.S. equities regardless of the user’s location or time zone.
Borderless Access:
Investors in Europe, Latin America, Africa, and Asia—regions often underserved by U.S. brokerage firms—can now gain exposure to American stocks without the need for intermediaries or complex cross-border arrangements.
Lower Costs and Greater Efficiency:
By utilising blockchain rails, Kraken’s solution reduces the fees and delays associated with traditional equity trading, including those imposed by local brokers and clearinghouses.
On-Chain Utility:
xStocks tokens are compatible with decentralised finance (DeFi) applications, enabling users to use their holdings as collateral or integrate them into other blockchain-based financial strategies—capabilities not available with traditional equities.
Real-Time Settlement and Transparency:
Transactions settle rapidly on the blockchain, and users can independently verify ownership and transfers, enhancing transparency and reducing settlement risk.
Redemption and Backing:
Each token is redeemable for the cash value of the underlying security, helping to ensure that token prices remain aligned with real-world market values.
Looking Ahead
Kraken’s launch of xStocks represents a significant step toward democratizing access to global financial markets.
By combining real asset backing with the flexibility of blockchain technology.
Kraken is enabling a new generation of investors to participate in U.S. equity markets with unprecedented freedom and efficiency.
The company has signalled plans to expand both the range of tokenised assets and the jurisdictions served, further broadening access to global equity markets in the coming months.
However, the really significant changes could come later. Could there, for instance, be global fungibility of the tokenised equities between both blockchains and wallets?
Could such tokens become dynamic, through the use of smart contracts and Web 3.0 AI tools, that will help traders look for additional trading opportunities, or ways to collateralise or swap their tokens?
The real opportunity for trading platforms is to transform TradFi by leveraging the benefits and technology that DeFi offers. Rather than trying to remodel Defi in TradFi’s image.
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
Darren has done interviews and analysis for companies like Queso, including an interview on technical trading levels.
A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
You can contact Darren at darrensinden@goodmoneyguide.com
