Cryptocurrency Exchange Kraken Expands $3.5B Tokenized Stock Trading to European Union

Core Viewpoint - Kraken has expanded its xStocks tokenized equity service to European Union clients, allowing them to trade digital representations of popular U.S. stocks and ETFs through its mobile app, utilizing Backed's tokenization technology [1][3]. Group 1: Service Expansion - The xStocks service has generated over $3.5 billion in combined trading volume since its international launch in June, offering more than 60 tokenized equities to clients across 140 countries outside the U.S. [2] - The expansion to the EU addresses challenges for European investors seeking U.S. market exposure, such as currency conversion fees and delays tied to U.S. market hours [3][4]. Group 2: Competitive Landscape - Kraken joins a growing number of platforms offering tokenized U.S. equities to international customers, with competitors like Robinhood, Bybit, and KuCoin also launching similar services [5]. Group 3: Business Strategy and Growth - Kraken is reportedly seeking $500 million in new funding at a $15 billion valuation, preparing for a potential IPO targeted for early 2026, and has sought regulatory approval from the SEC for its tokenized trading platform [6]. - The company has diversified its offerings by acquiring Breakout, a proprietary trading platform, allowing qualified traders access to significant trading capital [7][8]. Group 4: Multi-Chain Strategy - Initially deployed on the Solana blockchain, xStocks has expanded to support additional networks, including BNB Chain and TRON, generating over $2.5 billion in trading volume across platforms [9]. - Future plans include launching xStocks on Ethereum as ERC-20 tokens and supporting Kraken's upcoming Ink blockchain and other high-impact networks [10]. Group 5: Regulatory Environment - Traditional market operators have raised concerns about tokenized stock offerings, citing a lack of investor protection compared to conventional markets, prompting calls for stricter regulations [11]. - Despite regulatory uncertainty, major exchanges like Nasdaq and eToro are pursuing tokenized asset strategies, with Nasdaq filing a proposal to offer its own tokenized securities platform [12].