xStocks, a notable project backed by Backed Finance and supported by Kraken, has officially launched on the Ethereum Mainnet, transitioning from its previous presence on Solana, BNB Chain, and Tron. This expansion brings a total of 60 tokenized U.S. stocks to the widely-used smart contract platform, featuring prominent companies such as Nvidia, Tesla, and Amazon.
With this new move, Ethereum is positioned as a pivotal hub for tokenized equities, merging traditional finance with the burgeoning Web3 landscape. The platform has garnered significant attention, already processing over $3.5 billion in trading volume since its inception in June 2025. The aim is to provide direct access to traditional financial instruments while facilitating liquidity and enhanced market engagement.
Tokenized equities operate by issuing blockchain-based representations of physical stocks, allowing investors to trade, transfer, and utilize these assets within decentralized finance (DeFi) applications. This novel approach aims to democratize investment opportunities, reducing barriers for retail investors worldwide. With just an Ethereum wallet, individuals can gain exposure to major corporations without needing a conventional brokerage account, thus broadening access to financial markets.
Importantly, all tokenized securities from xStocks are collateralized 1:1 with the underlying equity, which promotes security and transportability across various Ethereum-based wallets and decentralized applications. Kraken’s partnership with Backed Finance will enable eligible clients to deposit and withdraw tokenized stocks directly on Ethereum, enhancing investor flexibility by facilitating easy transfers between centralized exchanges and self-custody wallets.
The tokenized equity market is rapidly evolving, but it is not without its challenges. Regulatory bodies worldwide are scrutinizing these instruments, focusing on potential issues related to investor rights and market oversight. The SEC in the United States has been increasingly vocal about the need for regulation, expressing concerns that tokenized equities may not afford investors the same protections as traditional shares, such as voting rights and direct claims to company assets.
Despite these challenges, the market momentum behind tokenized equities is undeniable. Reports indicate a cumulative market capitalization of $342 million for tokenized stocks, which represents only a small fraction (1.2%) of the overall $27.9 billion real-world asset tokenization market. Competition is heating up, with traditional firms like Robinhood exploring blockchain-based trading platforms, and others, including Gemini and eToro, considering similar offerings within the Ethereum ecosystem.
Backed Finance’s multi-chain strategy ensures that tokenized equities remain accessible across various blockchain platforms, reflecting the organization’s commitment to user autonomy. This approach resonates with industry leaders like Arjun Sethi, co-CEO of Kraken, who emphasizes the importance of interoperability and freedom for users in accessing markets on their preferred platforms.
As the tokenized equities market expands, industry players advocate for transparency and security through complete collateralization and blockchain disclosure. They argue that this innovative framework can provide investors with unprecedented access and protection compared to traditional financial systems, even amidst regulatory uncertainty.
