Kraken, Backed Bring Tokenized Equities Offering to Ethereum Mainnet
Crypto exchange Kraken and Swiss tokenization firm Backed have announced a new initiative to bring xStocks, a suite of tokenized equities, to the Ethereum network. This move is aimed at integrating stocks into decentralized finance (DeFi) infrastructure, allowing eligible Kraken clients to deposit and withdraw xStocks directly on Ethereum.
xStocks will exist as ERC-20 tokens on the Ethereum network, fully collateralized 1:1 by underlying equities. This means that investors can easily move tokenized stocks and ETFs between the exchange and self-custodial wallets while accessing various Ethereum-based DeFi protocols. The rollout on Ethereum follows earlier launches of xStocks on Solana, BNB Chain, and TRON, with the product generating over $3.5 billion in trading volume across centralized and decentralized exchanges since its debut in June.
Ethereum’s position as the largest smart contract network provides xStocks with immediate reach across thousands of decentralized applications. Kraken’s co-CEO, Arjun Sethi, stated that the multi-chain strategy is deliberate to ensure tokenized equities are accessible across ecosystems, portable between wallets and protocols, and composable within trusted applications. Ethereum was the next logical step in this strategy.
The move comes as there is a growing momentum for bringing traditional financial instruments, such as equities, onto blockchain rails through the tokenization of real-world assets. Other crypto exchanges like Gemini and Robinhood have already introduced tokenized U.S. stocks for EU users. However, tokenized equity offerings have raised concerns regarding limited shareholder rights and fragmented regulations.
This announcement signifies a significant step towards the mainstream adoption of tokenized equities and the integration of traditional financial instruments into the blockchain and DeFi space. The collaboration between Kraken and Backed showcases the potential for blockchain technology to revolutionize the way we trade and invest in financial markets.
The integration of xStocks on the Ethereum network further solidifies the importance of Ethereum in the DeFi ecosystem and its role in enabling the seamless transfer and trading of tokenized assets. As the tokenization of real-world assets continues to gain traction, we can expect to see more innovative solutions and partnerships emerge in the crypto space.
