Prominent cryptocurrency exchange Kraken has revealed a strategic partnership with fintech firm Backed to launch a new service offering on the Solana blockchain. This collaboration enables Kraken to provide non-US clients with access to tokenized US stocks, marking a significant step in its broader strategy to incorporate more traditional assets through tokenization.
According to an official statement, the tokenized stock offerings will be powered by Backed. These digital tokens, representing real US equities, will be issued and stored on the Solana blockchain. The network was selected for its "unmatched performance, low latency, and thriving global ecosystem," the announcement noted.
"The core value of cryptocurrency lies in the ability to view various transaction activities with full transparency," stated Kraken co-founder and CEO Arjun Sethi during his appearance at the Solana Accelerate event on May 22. "It is decentralized, open-source, and allows for rapid innovation. Companies like ours are fully equipped to adapt and lead in this evolving landscape."
This move to include traditional investment options may signal a shift in Kraken’s market positioning. Rather than competing solely as a cryptocurrency-focused platform against entities like Coinbase, Kraken appears to be targeting a broader audience—potentially challenging multi-asset brokerage services such as Robinhood.
On April 14, Kraken officially extended its stock and exchange-traded fund (ETF) trading services to US-based clients in several states, including New Jersey, Connecticut, Wyoming, Oklahoma, Idaho, Iowa, Rhode Island, Kentucky, Alabama, and the District of Columbia. The new offering for non-US users represents a natural extension of this strategy.
Back in 2021, another major crypto exchange, Binance, attempted a similar initiative. However, the project was eventually discontinued due to compliance issues raised by regulatory bodies across multiple jurisdictions.
Sethi also shared that Kraken is currently developing "a suite of microservices" aimed at broadening its product lineup to better serve its diverse and growing client base.
The Growing Trend of Real-World Asset Tokenization
Tokenization of real-world assets (RWA) has emerged as a major topic within the crypto sector in recent months. The total market value of tokenized RWAs grew significantly from $15.9 billion at the beginning of January to $22.7 billion by May 20—marking an impressive increase of 42.8% in just under five months.
Within this expanding market, tokenized private credit and US Treasury products currently dominate. Tokenized equities, by comparison, represent a smaller segment with a total valuation of approximately $373.4 million.
Robinhood is also making strides in tokenized stock offerings. According to recent reports, the trading platform is developing a proprietary blockchain dedicated to the tokenization of securities, with plans to provide European investors access to US-listed companies.
The growing interest in RWA tokenization among brokers, exchanges, and financial institutions stems from several strategic benefits. First, it reduces reliance on traditional financial infrastructure, thereby lowering operational costs. Second, tokenization technology supports the democratization of investing, allowing retail traders to access markets that were previously available only to accredited or institutional investors.
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Frequently Asked Questions
What are tokenized stocks?
Tokenized stocks are digital representations of traditional equities issued on a blockchain. They mirror the value of the actual stock and often provide similar economic benefits, such as dividends, but are traded as crypto tokens.
Why is Kraken offering tokenized stocks only to non-US users?
Regulatory requirements in the United States are complex and vary by state. By initially focusing on international users, Kraken can navigate different legal frameworks and offer these products with greater flexibility.
How does tokenization benefit everyday investors?
Tokenization lowers barriers to entry, reduces transaction costs, and enables fractional ownership. This allows smaller investors to buy portions of high-value stocks that might otherwise be inaccessible.
Is tokenization safe and regulated?
Tokenization projects operate within existing regulatory frameworks where possible. However, the regulatory landscape is still evolving, and investors should always conduct due diligence before participating.
Which blockchain is Kraken using for tokenized stocks?
Kraken has chosen the Solana blockchain for this initiative due to its high transaction speed, low fees, and expanding ecosystem.
Can US residents access any tokenized assets on Kraken?
As of now, Kraken offers stock and ETF trading to users in specific US states, but international users are the primary audience for the new tokenized stock offerings.