In a significant step forward, crypto exchange Kraken is set to introduce tokenized stock trading specifically for non-US users. This important development is intended to broaden access to US equities in a digital format, targeting both retail and institutional investors. The initiative will feature tokenized shares from industry giants such as Apple, Tesla, Meta, and Nvidia, providing a unique investment opportunity.

Collaborating with the innovative blockchain firm Backed, Kraken is launching a product known as “xStocks.” This service will soon be available to users in Europe, Latin America, Africa, and Asia, fostering a new era of digital asset trading.

24/7 Trading Accessibility with Solana and DeFi Integration

According to insights from Backed, xStocks will seamlessly connect with Kraken and decentralized finance (DeFi) frameworks based on Solana. This will allow users to trade tokenized stocks and exchange-traded funds (ETFs) at any time, day or night. The goal is to deliver “effortless blockchain-driven access” to financial markets that have typically been hampered by geographic and regulatory limitations.

A recent blog entry from Backed elucidated that this innovation will present real-world assets as on-chain tokens. This facilitates their use across DeFi platforms for functions such as collateralized lending and borrowing, which aligns them with how other cryptocurrency assets function.

The tokenized stock market is emerging as the next wave of digital asset evolution. Kraken’s co-CEO, Arjun Sethi, believes that tokenized equities could potentially outstrip the growth of the stablecoin market.

With Tether’s current market valuation around $240 billion, Sethi maintains that the long-term agility and scale of tokenized stocks and their derivatives can outdo traditional assets significantly.

“One tokenized equity could be equal to or exceed Tether,” he stated, envisioning a future where numerous tokenized securities are traded alongside robust futures and options markets.

Promoting Global Financial Inclusion through Decentralized Access

In addition to Kraken, other blockchain-driven entities like Plume Network and WhiteRock are also making strides in this domain, recognizing the rising global appetite for US equities in a decentralized format. The integration of xStocks with Solana allows users to leverage blockchain benefits during trading.

Users can engage in transactions using various methods: stablecoins, fiat currency, or other cryptocurrencies, benefiting from zero trading fees on Kraken. This allows individuals to retain control of their tokenized shares and interact with compatible DeFi frameworks.

The implications of tokenized stocks extend beyond standard trading practices. For instance, an investor can lend their tokenized shares of Apple through a lending protocol to earn passive income, or utilize them as collateral for loans without needing to sell their asset.

This new level of flexibility, combined with uninterrupted market access, could revolutionize how both individuals and institutional investors engage with global equity markets. Additionally, this initiative addresses a critical barrier for those outside the US who encounter regulatory and logistical issues when trying to access American financial products.

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