Kraken parent company Payward has expanded its tokenized equities platform, xStocks, by adding over 200 shares from the UK and Europe, raising the total assets managed to more than $1.1 billion.

Significant Shift to European Markets

This latest development signifies a strategic transition for Kraken, previously focused primarily on U.S. equities. The new offerings include all 40 companies from Germany’s DAX index, featuring major corporations such as SAP, Siemens, and Allianz. Additionally, numerous well-known UK and EU firms have been introduced, enabling eligible investors to engage with some of Europe’s largest corporations via blockchain-backed tokens.

Restrictions on Availability

Despite this expansion, the xStocks tokens are currently unavailable to investors in the UK and the U.S. Access remains confined to users in certain jurisdictions outside these two countries. This limited availability follows a recent partnership between Payward and the London Stock Exchange Group, aimed at tokenizing the 100 largest companies on the LSE. This initiative is scheduled for the exchange’s LSE 24 platform and is anticipated to launch in 2027, contingent upon regulatory approvals.

The xStocks operate on a 1:1 backed wrapper/tracker certificate model, where actual shares are bought and held securely, allowing for the minting of tokens that provide price exposure but do not confer traditional ownership rights, such as voting. This model combines the security of traditional market custodianship with the benefits of blockchain, including 24/7 trading capabilities.

Rising Demand in Tokenized Equities

The achievement of surpassing $1.1 billion in assets highlights the growing appetite for blockchain-based access to traditional equity markets. Tokenized shares facilitate around-the-clock trading, fractional ownership, and blockchain settlements—features increasingly attractive to crypto-focused investors looking to diversify their portfolios.

By significantly expanding its range of European stocks, Kraken is positioning xStocks for a more global market presence. The inclusion of all DAX companies provides users with a straightforward way to monitor Germany’s largest public enterprises through a unified platform.

Custodial Framework

The shares are managed by regulated custodians rather than Kraken or the token holders themselves, ensuring security and compliance. The primary U.S. stock custodian is Alpaca Securities LLC, while newer UK and EU stocks are handled through Payward’s collaboration with the multi-jurisdictional brokerage, GTN.

• Primary custodian (U.S. stocks): Alpaca Securities LLC, with additional insurance from Lloyd’s of London.
• Secondary custodians: InCore Bank and possibly others like Maerki Baumann.
• Custody for UK and EU stocks: Managed through partnership with GTN.

Future Outlook

The potential for further expansion heavily hinges on ongoing regulatory developments, particularly concerning the collaboration with the London Stock Exchange. As the trend of tokenizing real-world assets continues to grow, platforms that effectively integrate traditional markets with cryptocurrency systems are likely to garner increased interest from both retail and institutional investors.

The addition of over 200 UK and EU stocks is one of the most extensive expansions of a tokenized equity product to date and marks a significant milestone for Kraken as it aims to extend its reach beyond just cryptocurrency trading.