Kraken Introduces xStocks on Ethereum, Incorporating over 60 Tokenized Shares, among which are Tesla and Amazon

In a significant move for the crypto industry, Kraken has launched its tokenized equities product, xStocks, on the Ethereum mainnet. This expansion brings over 60 tokenized assets to Ethereum, including tech giants like Apple, Tesla, Nvidia, and Amazon.

The launch of xStocks, which was initiated at a virtual event in 2023, marks the continuation of Kraken's commitment to the tokenized asset market. The product supports 24/7 trading and fractional ownership of stocks, offering new opportunities for tokenized stock trading.

Each tokenized stock, issued as ERC-20 tokens, is backed one-to-one by the underlying securities. The price of each token reflects the price of the corresponding stock. This means that investors can own a fraction of a share, making it easier for them to diversify their portfolios.

However, it's important to note that tokenized stocks do not offer the same rights as traditional shares. Investors do not have claims on company assets or participate in governance. This neutral financial tool, as Kraken views it, integrates traditional assets with blockchain technology.

The tokenized stock market stands at $342 million, representing 1.2% of the total $27.9 billion tokenized real-world asset market. Despite regulatory pressure, crypto platforms continue to expand their offerings in this sector. Other platforms, such as Gemini and eToro, are also moving toward Ethereum-based tokenized equities.

Robinhood, the popular trading app, recently launched a blockchain to support tokenized stock trading in Europe. Meanwhile, DeFi Dev Corp was the first crypto treasury firm to tokenize public stock on Kraken's Solana-based xstock platform.

xStocks can be transferred across DeFi protocols, including lending platforms and yield farming tools. However, regulatory concerns persist for tokenized equities, with investor protections becoming legal issues raised by the U.S. Securities and Exchange Commission and others.

Eligible non-U.S. clients can deposit and withdraw xStocks using Ethereum wallets. The launch on Ethereum is expected to boost adoption further due to Ethereum's broader user base and liquidity. As the crypto industry continues to evolve, the integration of traditional assets with blockchain technology is set to reshape the financial landscape.

Kraken Introduces xStocks on Ethereum, Incorporating over 60 Tokenized Shares, among which are Tesla and Amazon