Kraken, a cryptocurrency exchange, has started allowing its European Union (EU) customers to trade tokenized U.S. securities, which helps spread this new type of asset more widely.
Tokenized equities are digital assets that refer to ownership in a company as digital tokens on a blockchain. As reported by Bloomberg, the offering will provide access to more than 60 tokenized equities in the region. These are blockchain-based certificates designed to mirror the price performance of companies such as Apple Inc., Meta Platforms Inc., and GameStop Corp.
Trading of these will be enabled locally. The service is supported by Backed Finance’s xStocks platform. The exchange initially began deploying the service in other global markets starting in May.
Tokenized equities differ from traditional stocks because they can be traded anytime, not just during regular market hours. Further, they can also serve as collateral on various blockchain platforms. They are considered a method to increase trading liquidity, allow ownership of small fractions of shares, and make U.S. stocks easier for investors outside the U.S. to access.
The overall market for tokenized shares remains limited in scale. Data from industry tracker rwa.xyz indicates the total value of these assets stands at approximately $461.24 million. To date, most tokenized shares have been created by external issuers rather than the companies they represent.
