Cryptocurrency exchange Kraken is expanding its focus beyond digital assets into traditional finance by preparing to launch tokenized US stocks for clients outside the United States.
Partnership with Backed and Solana Blockchain
The new service will be offered in collaboration with Backed, a newly established company specializing in asset tokenization. These tokens will be pegged to US publicly traded stocks and issued on the Solana blockchain, selected for its high speed and low transaction costs.
What Is Asset Tokenization?
Tokenization converts real-world assets (e.g., stocks, real estate, or commodities) into digital tokens tradable on blockchain platforms. By moving stocks to a decentralized ledger, brokers can:
- Bypass traditional market infrastructure.
- Reduce operational costs.
- Accelerate settlement times.
- Broaden access for global investors.
Arjun Sethi, Kraken’s co-CEO, emphasized at Solana’s Accelerate event in New York:
"Crypto thrives on transparency—it’s decentralized, open-source, and rapidly evolving. Companies like ours must adapt to stay competitive."
Competitive Landscape
Kraken’s move positions it against:
- Crypto-native platforms like Coinbase.
- Retail brokers such as Robinhood, which already blend crypto and stock trading.
Reports suggest Robinhood is in talks with crypto firms (e.g., Arbitrum, Solana Foundation) to support similar initiatives.
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Kraken’s Rollout Strategy
- Since April, Kraken has offered stock/ETF trading to select US clients (residents of NJ, CT, WY).
- This follows Binance’s discontinued 2021 effort, halted under regulatory scrutiny.
Growing Interest in Tokenized RWAs
The Real-World Asset (RWA) tokenization market has surged 40%+ YTD, reaching a **$22.7B** total market cap by late June. However, tokenized stocks remain a niche ($373M).
Infrastructure Development
Kraken is building a modular microservices framework to support:
- Scalability.
- Diverse product offerings (e.g., derivatives, compliance tools).
FAQs
1. How do tokenized stocks work?
They represent ownership of traditional stocks via blockchain tokens, enabling faster, cheaper cross-border trading.
2. Why use Solana?
Solana’s high throughput (~65,000 TPS) and low fees (<$0.01 per transaction) make it ideal for financial applications.
3. Is this available in the US?
Currently, Kraken’s stock trading is limited to certain US states; tokenized stocks target non-US clients initially.
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4. How does this compare to Binance’s past offering?
Binance’s 2021 tokenized stocks faced regulatory pushback; Kraken aims to navigate compliance more effectively.
5. What’s next for RWA tokenization?
Expect more platforms to integrate stocks, bonds, and commodities—bridging TradFi and DeFi.
Conclusion
Kraken’s venture into tokenized stocks signals a broader shift toward blockchain-powered traditional finance. By leveraging Solana’s efficiency and Backed’s expertise, it could democratize global access to US markets—if regulatory hurdles are cleared.