Apple, Tesla, and Nvidia shares to trade as digital tokens on crypto exchange Kraken
Kraken, a cryptocurrency exchange, intends to offer non-U.S. customers the ability to trade tokenized versions of popular stocks like Apple, Tesla, and Nvidia on a digital ledger. These “tokenized equities” aim to simplify access to U.S. stocks for international investors, enabling 24/7 trading, even outside U.S. stock market hours, similar to bitcoin.
Kraken said the rollout would start in the coming weeks, with the tokenized stocks going live in Europe, Latin America, Asia, and Africa. Kraken’s U.S. customers won’t be able to trade these tokenized equities.
Alexander Osipovich for The Wall Street Journal:
Kraken — which is based in the U.S. and has customers in more than 190 countries — plans to launch tokenized versions of more than 50 stocks and exchange-traded funds.
Kraken refers to its new breed of tokens with the brand name “xStocks.” They will be deployed on the Solana blockchain platform. Blockchains are decentralized ledgers that record crypto transactions.
Behind the scenes, xStocks tokens will be backed by shares of the underlying security, with Kraken’s partner company Backed Finance acquiring new shares as needed, the companies say. The tokens are to be redeemable for the cash value of the underlying securities. In theory, that should keep the tokens’ prices in line with the prices of the corresponding stocks and ETFs.
esides offering 24/7 trading, Kraken says its tokenized stocks will benefit international investors by giving them a cheaper, easier way to access the U.S. stock market.
Overseas investors can currently buy U.S. stocks through local brokerages, but “it typically involves very high fees and slow settlement times,” Kraken co-Chief Executive Arjun Sethi said in an interview. “There’s a lot of friction.”
Investors holding xStocks may eventually be able to trade them on crypto exchanges besides Kraken. They could move them into personal digital wallets where they hold their cryptocurrencies. Adventurous investors could even pledge their tokenized Apple and Tesla stock as collateral for crypto trading strategies.
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