Cryptocurrency exchange Kraken plans to offer tokenized U.S. stock trading for non-U.S. clients, marking a step forward for the company in advancing traditional asset trading through tokenization.
According to a statement shared with Cointelegraph, Kraken will offer these products through its new partner Backed, with the tokenized stocks being stored on the Solana blockchain, chosen for its 'superior performance, low latency, and thriving global ecosystem.'
Kraken co-CEO Arjun Sethi stated at Solana's Accelerate event on May 22: 'The whole point of cryptocurrency is that we can see everything very transparently.'
Incorporating traditional investment options into its products may indicate that Kraken wants to compete more with large brokerages like Robinhood, rather than just competing with cryptocurrency exchanges like Coinbase.
In 2021, cryptocurrency exchange Binance launched a similar initiative but ultimately canceled it due to regulatory issues in various countries.
Sethi mentioned that Kraken is building 'a set of microservices' to expand its product offerings.
Kraken's tokenization initiative
Tokenization of real-world assets (RWA) has become a hot topic in the cryptocurrency space. The total market capitalization has risen from $15.9 billion on January 3 to $22.7 billion on May 20, an increase of 42.8%.
Robinhood is also advancing tokenized stock trading, as the company is developing a blockchain to give European investors access to tokenized securities of U.S.-listed companies.
RWA tokenization is gaining popularity among brokerages, exchanges, and companies as it lowers upfront costs and democratizes investment opportunities, allowing retail investors to participate in markets previously reserved for accredited investors.
