📰 What happened: Kraken buys Backed Finance
Kraken officially announced that it will acquire Backed Finance, the firm behind xStocks — a platform that issues tokens representing traditional listed stocks (and ETFs) in tokenized form.
The objective: to fully integrate the issuance, trading, and settlement of those tokenized assets within the Kraken ecosystem — not only to offer them as third parties but to manage them directly as part of Kraken.
xStocks already has more than 60 tokenized stocks/ETFsbacked 1:1 by underlying assets.
Since its launch this year, xStocks has recorded a combined volume (on-chain + exchange) of over US$ 10 billion in just six months — indicating quite a demand so far.
🎯 Why it matters — implications of the acquisition
This acquisition represents a key step for Kraken towards integrating traditional financial markets + crypto into a single entity. Some key points:
Real tokenization of traditional assets (RWA): traditional stocks and ETFs become tokens, allowing them to be traded 24/7, with mechanisms more similar to crypto: on-chain liquidity, digital custody, interoperability with DeFi. This reduces traditional frictions (stock hours, custody, borders).
TradFi ↔ Crypto Bridge: Kraken consolidates a platform where an investor can hold crypto, tokenized assets, stablecoins, etc., in a single ecosystem — bringing crypto closer to the traditional financial world and facilitating institutional or conventional investor adoption.
Scalability and innovation: by having control over the infrastructure (issuance, custody, settlement), Kraken can launch new products: tokenization of more asset classes, integration with DeFi, on-chain collateral, loans, secondary markets, etc.
Reduction of intermediaries: blockchain + tokenization + regulated exchange = less intermediation (brokers, custodians, clearing houses), which can lower costs and speed up transactions.
Democratization of global access: investors from anywhere in the world could access tokenized stocks/ETFs without going through traditional systems, with fewer barriers to entry — ideal for those who do not have easy access to USD markets.
⚠️ Risks, challenges, and what will depend on implementation
Although tokens are backed 1:1, there is regulatory risk: traditional markets and regulators may impose different requirements on tokenized assets.
Adoption depends on real demand: if not many users prefer tokenization over traditional mechanisms, the momentum may be limited.
Technical / custody / interoperability risks: offering tokenization on multiple blockchains (they are already on Solana, Ethereum; planning to expand to BNB Chain, Tron, others) involves complexity. If there are errors, it could affect trust.
Volatility perception: although they are traditional stocks, when operating on-chain they may be subject to crypto-environmental volatility — which can alter how they are perceived compared to 'normal' stocks.
Regulatory and legal competition: future regulations on tokenization, taxation, custody, 'know your customer' (KYC/AML) could affect operability or international attractiveness.
🔮 What could come in the medium term — scenarios and impact
Growth of the tokenized asset market (RWA): If xStocks and similar entities succeed, more investors (institutional and retail) will be encouraged to enter, which could significantly expand the market for tokenized assets.
Integration with DeFi / open finance: these tokens could be used as collateral, in loans, in decentralized secondary markets, creating a bridge between traditional finance and DeFi.
Competition to traditional systems: brokers, custodians, and traditional exchanges could feel pressured, and some might adapt by creating tokenized products or collaborating with crypto exchanges.
Global accessibility to international assets: people in countries that cannot easily invest in global exchanges could access stocks/ETFs through tokens, enhancing global financial inclusion.
Maturation of the crypto ecosystem towards 'global financial infrastructure': if more exchanges and actors follow this path, crypto stops being 'just coins and speculation' and becomes part of the global capital market infrastructure.
Kraken's acquisition of Backed Finance may be one of the most relevant milestones of 2025 in crypto / digital finance. It marks that the tokenization of real assets has stopped being a small experiment and begins its serious scaling. If the execution is good, it could have a disruptive impact on how global investing is done, combining the best of traditional markets + blockchain.
