Original author: 1912212.eth, Foresight News
On May 22, the fully encrypted trading platform Kraken announced that it will cooperate with Backed Finance to launch a tokenized stock and ETF trading service called xStocks, which will first cover more than 50 US-listed stocks and ETFs such as Apple, Tesla, and Nvidia. In recent years, the integration of blockchain technology and traditional finance has been accelerating, and cryptocurrency trading platforms are becoming the pioneers of this change. The previous movement of tokenizing US dollars and treasury bonds is now being pushed by trading platforms to US stocks?
Strategic Expansion
Founded in 2011, Kraken is one of the worlds oldest cryptocurrency trading platforms, known for its security and compliance. In recent years, as competition in the crypto market has intensified, Kraken has continued to expand its business boundaries. In 2024, Kraken acquired the futures trading platform NinjaTrader and launched more than 11,000 traditional trading services for US stocks and ETFs in some states in the United States.
Tokenized stocks refer to the conversion of traditional stocks or ETFs into digital tokens through blockchain technology, with each token representing a portion of the ownership of the underlying asset. These tokens can be traded 24/7 on the blockchain, breaking through the trading time and geographical restrictions of the traditional stock market. Krakens xStocks is based on the Solana chain and plans to be open to non-US customers, covering the European, Latin American, African and Asian markets. Backed Finance is responsible for acquiring and custodial underlying stocks, ensuring that each token is pegged to the real asset 1:1, and the holder can redeem the cash value of the token at any time.
This move is not an isolated incident. In 2025, global crypto trading platforms are accelerating their penetration into traditional finance. For example, Bybit recently announced support for USDT trading of 78 global high-quality stock assets, covering technology giants (such as Microsoft and Google), consumer goods companies (such as Coca-Cola) and energy companies (such as ExxonMobil). Users can use stablecoin USDT for transactions and enjoy the advantages of low threshold and high liquidity. The industry trend shows that tokenized assets are becoming a bridge between crypto trading platforms and traditional finance.
FTX and Binance: The History of Tokenized U.S. Stocks
The concept of tokenized stocks is not new. As early as around 2020, crypto trading platforms began to test the waters in this field, among which FTX and Binances practices are the most representative. Founded in 2019, FTX was once the worlds third largest crypto trading platform, known for its innovative products. In 2020, FTX launched tokenized stock trading, allowing users to trade digital tokens of US stocks such as Tesla and Apple through its platform. These tokens are provided by FTXs Swiss subsidiary Canco GmbH and are linked to real stocks hosted by third-party brokers. FTXs tokenized stocks support fractional trading, and users can buy fractional stocks at a cost as low as $1, greatly reducing the investment threshold. In addition, FTX has also tried tokenized ETFs, such as the SPDR SP 500 ETF (SPY).
However, FTXs tokenized stock business was limited by compliance issues and market volatility. In November 2022, FTX went bankrupt due to mismanagement of funds and fraud scandals, and its tokenized stock business was terminated. Nevertheless, FTXs attempt proved the market demand for tokenized stocks, especially in emerging markets and among young investors.
In 2021, Binance also launched tokenized stock trading, the first batch of which included stocks such as Coinbase and Tesla. These tokens are settled in Binances stablecoin BUSD and support fractional trading, aiming to provide global users with a convenient channel for investing in US stocks. However, Binances tokenized stock business soon encountered regulatory resistance. Financial regulators in many countries questioned its compliance, believing that tokenized stocks may have bypassed the regulatory framework of the traditional securities market. In the same year, Binance announced the termination of the business and focused on core crypto trading.
The experience of FTX and Binance shows that tokenized stocks are technically feasible, but face challenges in compliance, asset custody and market acceptance. Kraken’s launch of xStocks has clearly learned from the lessons of its predecessors, emphasizing cooperation with regulators and ensuring asset transparency and security through Backed Finance.
Why trading platforms are keen on tokenized stocks
Crypto trading platforms have been deploying tokenized stocks, which are driven by both technology and market and strategic considerations. According to data from April 2025, the total market value of U.S. stocks is about 52 trillion U.S. dollars, accounting for more than 45% of the global stock market size. Such a huge market share has allowed a number of trading platforms to expand their user base and seize the traditional financial market. The user group of crypto trading platforms is mainly young investors with higher risk appetite, but the scale of the traditional financial market far exceeds that of the crypto market. Tokenized stocks provide trading platforms with an entry point into traditional finance, attracting traditional investors interested in stocks and ETFs. For example, Krakens xStocks is aimed at non-U.S. customers, accurately targeting investors in emerging markets who have strong demand for U.S. stocks but are restricted by traditional channels.
In addition, the core advantages of blockchain technology are decentralization, transparency and efficiency. Tokenized stocks use blockchain to achieve 24/7 trading, instant settlement and low-cost operations, solving the problems of limited trading hours and high intermediary fees in traditional stock markets. In addition, blockchain supports fractional trading, allowing small investors to participate in the investment of high-value assets, enhancing financial inclusion.
In the context of fierce competition among crypto trading platforms, tokenized stocks have become a weapon for differentiated competition. Krakens xStocks not only provides trading functions, but also allows users to use tokens as collateral for DeFi protocols, enhancing the liquidity and application scenarios of assets. This cross-border integration provides users with more diversified investment options and can also consolidate the ecological stickiness of the trading platform.
What impact will it have on traditional stock trading platforms?
The tokenized stock business of trading platforms such as Kraken poses certain challenges to traditional stock trading platforms (such as Nasdaq and NYSE), but also brings opportunities for cooperation and transformation. The trading hours of traditional stock trading platforms are usually limited to specific hours on weekdays, and cross-border investment involves high fees and settlement cycles. The 24/7 trading and instant settlement characteristics of tokenized stocks directly challenge the operating model of traditional trading platforms. Especially in emerging markets, investors may prefer to obtain US stock exposure through crypto trading platforms rather than traditional brokers.
Facing the impact of blockchain technology, traditional trading platforms are not without countermeasures. Institutions such as Nasdaq have begun to explore the application of blockchain in securities settlement and clearing. For example, Nasdaq has cooperated with R3 to develop an asset management platform based on the Corda blockchain. In the future, traditional trading platforms may cooperate with crypto trading platforms to launch their own tokenized products, or provide more efficient trading services through technological upgrades.
The rise of tokenized stocks has prompted regulators to re-examine the compliance framework of blockchain finance. This provides traditional trading platforms with an opportunity to work with regulators to maintain market fairness and stability by setting industry standards. For example, the US SECs recent enforcement actions against crypto trading platforms have eased, showing that regulators are open to blockchain technology innovation.
summary
Krakens xStocks, Bybits USDT stock trading, and FTX and Binances early attempts together outline the evolution of tokenized stocks. This trend is not only the product of the integration of blockchain technology and traditional finance, but also a microcosm of the diversification and technology-driven global investment demand. For investors, tokenized stocks provide a more flexible and low-cost asset allocation method; for trading platforms, it is a strategic weapon to seize the market and differentiate competition; for traditional stock trading platforms, it is both a challenge and an opportunity for technology upgrades and market expansion.
However, the popularization of tokenized stocks still faces multiple challenges in compliance, technology and market education. Trading platforms such as Kraken need to find a balance between innovation and regulation to ensure asset security and user trust. In the future, as blockchain technology matures and the regulatory environment becomes clearer, tokenized stocks are expected to become an important part of the global financial market.
