Kraken and Swiss tokenization firm Backed are expanding xStocks to the Ethereum network, the companies said Tuesday. The move lets eligible Kraken customers deposit and withdraw tokenized shares directly on Ethereum and connects equities to the wider decentralized finance (DeFi) ecosystem.
On Ethereum, xStocks will be issued as ERC-20 tokens that are collateralized 1:1 by the underlying stocks or ETFs. That structure lets investors move holdings between Kraken and self-custodial wallets and use them in Ethereum-based DeFi applications such as lending, swaps and yield strategies.
The Ethereum rollout follows earlier launches on Solana, BNB Chain and TRON. Since xStocks debuted in June, trading across centralized and decentralized venues has exceeded $3.5 billion, illustrating growing demand for tokenized real-world assets.
“Our multi-chain strategy is deliberate,” said Kraken co-CEO Arjun Sethi, noting that broader network support increases portability and composability across wallets and protocols.
Tokenization of traditional securities has drawn institutional interest — exchanges including Gemini and Robinhood have rolled out tokenized U.S. stocks for EU users — but it also raises legal and practical questions. Critics point to limited shareholder rights for token holders and a patchwork of national regulations that could complicate custody and voting.
For investors, the key attraction is access: Ethereum gives tokenized equities immediate reach into thousands of decentralized applications. However, market and legal risks remain; prospective users should confirm custody, governance rights and regulatory status before allocating capital.
Source: CoinDesk. Read the original coverage for full details.