Crypto exchange Kraken and Swiss tokenization firm Backed announced on Tuesday, September 2, that they will bring tokenized U.S. stocks to the Ethereum blockchain through a product called xStocks.
According to reports, this is expected to allow non-U.S. Kraken to trade stocks like Apple, Tesla, and Nvidia on Ethereum in the form of ERC-20 tokens.
Traders will be able to deposit and withdraw xStocks directly on Ethereum, the largest blockchain for decentralized finance, which currently holds around $107 billion in assets, according to DefiLlama.
Each token will be backed one-to-one by the real stock or ETF. This means that for every token in circulation, there will be a matching stock held as collateral. The expansion makes Ethereum the fourth blockchain to host xStocks, aside Solana, BNB Chain, and Tron.
Kraken explained that this aimed to tap into a bigger pool of liquidity and connect to thousands of apps already running on the network. The company also highlighted that the 24/7 trading availability offers more flexibility compared to traditional stock markets.
Kraken co-CEO Arjun Sethi said Ethereum is the “the next logical step” for the firm’s multi-chain strategy. It ensures tokenized equities are accessible across ecosystems, portable between wallets and protocols, and composable within the applications users already trust.”
Backed co-founder Roberto Klein also explained that Ethereum offers deeper connections to established DeFi protocols. “Through the expansion of xStocks to Ethereum Mainnet, xStocks tap into the largest pool of on-chain liquidity and connect to the most well-established DeFi protocols in the space,” he said.
Since its launch in June, xStocks has generated over $3.5 billion in combined trading volume across exchanges, according to the company itself. Backed also announced that the product surpassed $500 million in on-chain transaction volume just 49 days after debut. Still, some industry voices said the numbers are small compared to the other crypto markets.
Kraken itself remains one of the largest U.S.-based exchanges, recording $1.5 billion in revenue and $664 billion in trading volume in 2024, with recent daily activity hitting $1.3 billion, according to CoinGecko.
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