Ethereum News Today: Ethereum Becomes Gateway for Tokenized Stocks to Tap DeFi's $90B Ecosystem

Kraken, in partnership with Backed Finance, has expanded its tokenized equities offering to the Ethereum network, introducing xStocks as ERC-20 tokens representing real-world assets such as stocks and ETFs. This move follows the product’s initial launches on Solana, BNB Chain, and Tron, and aims to integrate tokenized equities with Ethereum’s extensive decentralized finance (DeFi) ecosystem. xStocks, fully collateralized 1:1 by underlying equities, allows eligible clients to deposit and withdraw tokenized stocks directly on Ethereum, enabling seamless movement between self-custodial wallets and decentralized applications [2].

The xStocks portfolio includes major equities such as NVIDIA, Tesla, Apple, Amazon, and Walmart, offering investors a diversified range of tokenized assets. The initiative is part of a growing trend to bring traditional financial instruments onto blockchain platforms, leveraging Ethereum’s position as the largest smart contract network. As of Monday, Ethereum hosted $90.8 billion in total value locked (TVL), accounting for 60% of the DeFi market, according to CoinDesk [1]. Kraken’s multi-chain strategy, as explained by co-CEO Arjun Sethi, ensures tokenized equities are accessible across various blockchain ecosystems, portable between wallets and protocols, and composable within trusted applications [2].

Ethereum’s deep liquidity and large user base make it a natural fit for the next phase of xStocks’ expansion. Since its debut, xStocks has generated over $3.5 billion in combined trading volume across centralized and decentralized exchanges. The product’s expansion to Ethereum is expected to enhance liquidity and provide greater flexibility to investors, allowing them to access on-chain activity and DeFi protocols directly from their Ethereum-based wallets [2]. Kraken also highlighted the importance of Ethereum as a hub for smart contract innovation and decentralized finance, making it an essential platform for bringing traditional assets onto blockchain infrastructure [3].

Despite the growing interest in tokenized equities, the market remains in a legal gray area. Critics and regulators have raised concerns over the limited shareholder rights and potential regulatory fragmentation associated with these products. Legal experts have noted that tokenized stocks may not offer the same protections as traditional stock ownership, including voting rights and direct claims on company assets. Additionally, stock exchanges and global regulators, including the U.S. Securities and Exchange Commission (SEC), have called for stronger oversight of tokenized equity offerings [1].

The tokenized equities market, while still in its early stages, is showing signs of growth. As of the latest data from RWA.xyz, the tokenized stock market capitalization stands at $342 million, representing just 1.2% of the overall $27.9 billion tokenized real-world asset (RWA) market cap. Despite these modest figures, the industry is witnessing significant activity, with other exchanges like Gemini and Robinhood also launching tokenized stock offerings. Robinhood, for instance, introduced a blockchain to facilitate tokenized stock trading in Europe [1]. These developments indicate a broader shift in the financial industry toward blockchain-based solutions.

Kraken’s expansion of xStocks to Ethereum is a strategic move that aligns with the company’s mission to integrate traditional finance with decentralized infrastructure. The platform’s adoption of Ethereum is expected to attract a wider range of investors and developers, enhancing the accessibility and programmability of tokenized equities. As the market continues to evolve, the balance between innovation and regulatory clarity will be critical in determining the long-term success of tokenized equity products.

Source:

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

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

[3] Kraken Brings Tokenized Equities to Ethereum Blockchain (https://www.pymnts.com/cryptocurrency/2025/kraken-brings-tokenized-equities-ethereum-blockchain)