Ethereum News Today: Ethereum Becomes New Frontier for Real-World Equity Ownership

Kraken and Backed Finance have announced the launch of xStocks on the Ethereum network, marking a significant expansion for tokenized equities. The platform now offers 60 tokenized stocks, including shares of major companies like NVIDIA, Amazon, Tesla, Meta, and Walmart, with a total trading volume of $3.5 billion recorded since its initial rollout on Solana, BNB Chain, and Tron [2]. These tokenized equities exist as ERC-20 tokens, fully collateralized 1:1 by the underlying assets, and are accessible via Kraken’s platform as well as self-custodial wallets [3]. The move follows earlier announcements from Gemini and eToro exploring similar offerings on Ethereum [2].

Ethereum’s adoption of xStocks is part of a broader trend of integrating traditional financial instruments into blockchain infrastructure. The platform’s launch leverages Ethereum’s position as the leading smart contract network, with a total value locked (TVL) of $90.8 billion as of early September 2025. This integration enables tokenized stocks and ETFs to be used across decentralized finance (DeFi) protocols, wallets, and decentralized applications (dApps), expanding their utility beyond centralized exchanges [3]. Kraken co-CEO Arjun Sethi emphasized that Ethereum is the “center of gravity for smart contract innovation” and noted that the expansion would allow for “programmable, interoperable, and continuously accessible” tokenized equities [4].

The xStocks offering is fully collateralized and backed by real-world assets (RWAs), with each token representing a fractional ownership in the corresponding equity. This model aligns with Backed Finance’s broader strategy to bring RWAs onto blockchain platforms. The company, which operates in jurisdictions including Bermuda and Jersey, has partnered with several crypto exchanges to facilitate the tokenization and trading of equities. However, xStocks are not registered with local securities regulators, and their legal status remains subject to evolving regulatory frameworks [4].

Despite the growth of the tokenized equities market, the sector remains in a legal gray area, with concerns over shareholder rights and regulatory clarity. Critics argue that tokenized stocks may not provide the same legal protections as traditional stock holdings, and there are limitations regarding direct claims on company assets or voting rights [2]. Additionally, major stock exchanges and global regulators have raised concerns, calling for tighter oversight from the U.S. Securities and Exchange Commission (SEC) and other regulatory bodies [2]. The SEC’s Project Crypto initiative, led by Chair Atkins, aims to modernize securities rules to enable on-chain financial markets, including tokenized equities [1].

The tokenized equities market currently has a market capitalization of $342 million, representing just 1.2% of the overall $27.9 billion tokenized RWA market cap [2]. While this figure is relatively small, it reflects a growing interest in tokenized assets, particularly among institutional and retail investors seeking greater liquidity and accessibility. The xStocks offering is available to eligible Kraken clients in over 140 countries but is not accessible to U.S. residents or persons. This restriction reflects ongoing regulatory uncertainty and the need for compliance with evolving legal frameworks in different jurisdictions [4].

Kraken and Backed continue to advocate for a regulatory environment that supports innovation while protecting investors. They emphasize the potential benefits of tokenized equities, including faster settlement times, increased transparency, and broader market participation. As the market matures and regulatory clarity improves, tokenized equities may become a more prominent component of global capital markets, particularly as blockchain technology continues to evolve.

Source:

[1] Public Stocks on Public Blockchains: How Do We Get There? (https://www.paradigm.xyz/2025/09/public-stocks-on-public-blockchains)

[2] Tokenized Equity Product xStocks Launches on Ethereum (https://cointelegraph.com/news/xstocks-launches-ethereum-60-tokenized-stocks-nvidia-tesla)

[3] Kraken, Backed Bring Tokenized Equities Offering to ... (https://www.coindesk.com/business/2025/09/02/kraken-backed-bring-tokenized-equities-offering-to-ethereum-mainnet)

[4] xStocks launch on Ethereum (https://blog.kraken.com/product/xstocks/launch-on-ethereum)