It has been over 15 years since the first bitcoin was created, and cryptocurrency is now fulfilling some of its early promises by transforming long-standing financial systems. The latest focus within the sector is equity markets. Crypto exchange Kraken plans to offer tokenized versions of over 50 stocks, including Apple, Tesla, and Nvidia, as well as exchange-traded funds (ETFs), signaling the blockchain’s evolution beyond a niche innovation. Named xStocks, Kraken’s tokenized equities are digital representations of real shares tradable on the Solana blockchain and will be available solely to customers in Europe, Latin America, Africa, and Asia. While Binance previously explored tokenized stocks in 2021 before regulatory concerns halted the effort, Kraken’s method is more structured and compliance-oriented, relying on partnerships and a clear value proposition. Each xStock is backed one-to-one by real shares held by Kraken’s Swiss partner, Backed Finance, allowing investors to redeem tokens for equivalent cash value. This ensures price parity and transparency, addressing two common issues in early blockchain projects. Unlike targeting American day traders or Wall Street professionals, Kraken’s xStocks are aimed at retail investors in emerging and underserved markets, where capital controls or limited brokerage options can make investing in U. S. stocks costly and slow. Leveraging blockchain’s decentralized features, Kraken aims to provide 24/7 instant trading access regardless of time zones or economic restrictions. Tokenized equities’ core innovation lies in their blockchain infrastructure—using smart contracts and decentralized ledgers to enable fractional ownership, continuous trading, and greater global accessibility. This model presents an attractive alternative for investors in regions with restricted access to U. S.

financial markets. Kraken is part of a broader movement toward tokenizing equities and real-world assets. Chainalysis CEO Jonathan Levin noted that financial instruments beyond native cryptocurrencies increasingly reside on blockchains. BlackRock CEO Larry Fink envisions a future where all assets—stocks, bonds, funds—are tokenized and tradable online. BlackRock recently launched its first tokenized fund backed by short-term U. S. Treasurys on Ethereum. Additionally, partnerships such as that between R3 and Solana Foundation aim to bring regulated real-world assets to public blockchains, while major financial players like Visa, Mastercard, and J. P. Morgan explore tokenized payments and financial systems. Despite promise, tokenized equities face challenges, chiefly regulatory uncertainty and risks tied to crypto entities entering mainstream finance without traditional oversight. Credible custody solutions are essential; some platforms use licensed custodians holding actual shares, while others rely on synthetic assets, raising concerns about counterparty risk. Technologically, tokenized equities operate on public and permissioned blockchains. Ethereum is popular due to its smart contract functionality and DeFi liquidity, but scalability issues and high fees drive some platforms to alternatives like Solana, Avalanche, and Polygon. The adoption of tokenized equities could disrupt traditional financial intermediaries by streamlining settlement and custody, potentially reducing settlement times from days (T+2) to nearly instantaneous, lowering risks and costs. However, disintermediation raises issues about market integrity, manipulation, insider trading, and investor protections without centralized oversight, highlighting the continuing need for compliance and risk management in finance.