Kraken exchange plans to launch tokenized stocks and ETFs of Apple, Tesla, and Nvidia
Kraken crypto exchange has disclosed its intention to implement tokenized versions of 50 US stocks and ETFs. This will enable international clients to access renowned assets, including Apple, Tesla, Nvidia, and the SPDR S&P 500 ETF (SPY), at any given moment. The objective of this initiative, as reported by The Wall Street Journal, is to facilitate the interaction between non-US investors and American equities.
The upcoming weeks will see the introduction of the new product, xStocks, in a variety of regions, including Europe, Latin America, Africa, and Asia. It will operate on the Solana blockchain. Each xStock will be backed by genuine shares of the underlying assets in a 1:1 ratio.
Kraken has entered into a partnership with Backed Finance, which will be responsible for the acquisition and custody of the tangible stocks or ETFs. Subsequently, an equivalent number of tokenized versions will be issued on the blockchain.
A critical aspect of xStocks is that each token will be redeemable for the financial value of the asset it represents, thereby guaranteeing that the token’s price remains consistent with conventional market values.
Furthermore, xStocks will be accessible for trading at all hours of the day and night, enabling transactions to take place during periods when traditional stock exchanges are closed, such as weekends, holidays, and evenings.
Kraken’s goal with this initiative is to offer a more flexible, cost-effective, and expedited method for global investors to access American equities. Currently, numerous international investors encounter high brokerage fees, restricted asset options, and extended settlement times when attempting to acquire US equities through local financial intermediaries. Arjun Sethi, Kraken’s co-CEO, is of the opinion that tokenization on a public blockchain could be a viable solution to these concerns.
