Kraken Acquires Backed Finance

3 days ago7 min read

In a move that signals a deepening convergence between traditional finance and the digital asset frontier, Kraken, the U. S.’s third-largest centralized exchange by volume, has strategically acquired Backed Finance, a Swiss-based issuer of tokenized real-world assets (RWAs). This acquisition isn't merely a corporate footnote; it's a calculated power play aimed at supercharging Kraken's xStocks platform, which already boasts a staggering $10 billion in total trading volume as of last November.For those of us watching the tokenization space, this feels like a pivotal moment—a major exchange is not just dabbling in tokenized equities but is now vertically integrating the entire issuance pipeline. Backed Finance brings to the table a crucial piece of the puzzle: a regulated framework for creating and managing tokenized versions of blue-chip stocks like Apple and Tesla, as well as ETFs and bonds, all represented as ERC-20 tokens on the blockchain.By bringing Backed fully into its ecosystem, Kraken isn't just adding a service; it's aligning strategy and investment priorities to unlock what it calls the 'full economic potential' of xStocks, effectively controlling the asset creation, listing, and trading lifecycle under one corporate umbrella. This deal must be viewed against the backdrop of a frenetic race within crypto to capture the multi-trillion-dollar opportunity of RWAs, where giants like BlackRock are launching tokenized funds on Ethereum and platforms like Ondo Finance are gaining massive traction.Kraken's acquisition is a direct response to this competitive pressure, a bid to offer European and eventually global users a seamless, compliant on-ramp to fractionalized ownership of traditional securities, available for trading 24/7. However, the path forward is strewn with regulatory complexity.While Backed operates under Switzerland's progressive financial market laws, Kraken's primary battleground is the United States, where the SEC's stance on tokenized securities remains notoriously hostile and unclear. This creates a fascinating, bifurcated strategy: leveraging European regulatory clarity to build the product while navigating the U.S. minefield.The long-term implications are profound. If successful, Kraken could erode the monopolistic hold of traditional brokers and depository trusts, democratizing access to global equity markets in a way that transcends geographic and socioeconomic barriers.Yet, challenges abound—from ensuring robust collateralization and transparency for the underlying assets to building liquidity deep enough to rival traditional markets. This acquisition is less about a simple product expansion and more about Kraken planting a flag in the future of finance, betting that the lines between TradFi and DeFi will not just blur but disappear entirely, with tokenization as the bridge. The coming months will reveal whether this bold integration can translate technical promise into mainstream adoption, or if it will remain a niche offering for crypto-native investors.

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#Kraken

#Backed Finance

#acquisition

#tokenized stocks

#xStocks

#centralized exchange

#trading volume