Kraken Eyes Tokenized Stocks: Buy Coffee with Tesla?

Tokenized Stocks: Kraken's Bold Vision

Cryptocurrency exchange Kraken is making a significant push into the tokenized equities market with its xStocks platform. The goal? To offer 24/7, permissionless, and non-custodial tokenized stocks globally.

xStocks: What's the Deal?

According to Mark Greenberg, VP at Kraken, xStocks are tokenized versions of traditional stocks, available around the clock, and without needing someone's permission. Launched a few months ago, the platform currently offers 60 different stocks, primarily targeting markets in Latin America, Asia, and the Middle East. Expansion into Europe is planned for the near future.

Democratizing Equity Access

The appeal of xStocks is clear, particularly in regions with limited access to traditional equity markets. The fractionalization element also opens doors for smaller investors. Someone with only $10 or $20 can now own a piece of Tesla, something that might not have been previously possible.

How it Works

The process is straightforward. Each token represents a share held in a special purpose vehicle (SPV) located in Jersey. These tokens are then minted through a prospectus in Europe. When a token is minted, a corresponding share is purchased, and these tokens can then be traded on Kraken, decentralized exchanges (DEXs), and other platforms.

Kraken vs. Traditional Tokenized Offerings

Greenberg emphasized Kraken's unique approach, differentiating it from early tokenized stock offerings that often restricted buying and selling to the issuer. xStocks are designed to be freely transferable.

Integrating Tokenized Stocks with Everyday Life

Kraken envisions a future where tokenized stocks are integrated into everyday spending. With the upcoming launch of a card in Europe and the UK, users will be able to hold their assets in tokenized stocks like Tesla and use them to make purchases, like buying coffee.

Key Takeaways

• Global Access: xStocks aim to break down barriers to equity investment, especially in underserved markets.
• Fractional Ownership: Allows individuals to invest small amounts in high-value stocks.
• Seamless Integration: Kraken plans to integrate tokenized stocks into everyday spending.
• Growing Market: The tokenized real-world assets market shows consistent growth, with increasing trading volume and active users.

Market Growth

Data from RWA.XYZ indicates a growing market for tokenized stocks. The total value is nearly $400 million, with monthly transfer volumes showing large increases. Exodus Movement Inc. leads the way, followed by tokenized Tesla and MicroStrategy. Major stocks like Apple and Nvidia are also represented.