The Kraken-Backed Acquisition: A Catalyst for Tokenized Equities and Open Capital Markets

Kraken's acquisition of Backed Finance AG was a calculated step to fast-track the adoption of xStocks, which are fully collateralized tokenized equities and ETFs. These assets, backed 1:1 by the underlying securities, enable 24/7 trading access for non-U.S. investors, a critical advantage in a globalized economy. According to a report by Business Wire, the acquisition was positioned to "unlock global demand for tokenized equities" by leveraging Backed's expertise in regulated asset tokenization.

The xStocks initiative has already demonstrated explosive growth. Within six months of its launch, the platform surpassed $10 billion in combined exchange and onchain trading volume, with over $1 billion in onchain transactions and 37,000 unique holders by October 2025. This rapid adoption is driven by Kraken's partnerships, such as its collaboration with Alchemy Pay, which expanded xStocks' reach to 160 countries and enabled fractional ownership starting at $1 USD. Such innovations are dismantling barriers to entry for traditional equities, particularly in emerging markets.

Infrastructure Consolidation and Institutional Backing

Kraken's strategic infrastructure consolidation has been further bolstered by a $800 million funding round in November 2025, led by institutional heavyweights like Jane Street, DRW Venture Capital, and Citadel Securities. The primary tranche of $200 million was secured at a $20 billion valuation, reflecting institutional confidence in Kraken's vision to integrate traditional financial products on-chain. As stated by Kraken in its blog, the funds will accelerate the exchange's transition from a crypto-only venue to a "multi-asset, globally regulated trading system."

This funding round is not merely a capital injection but a strategic alignment with liquidity providers and market infrastructure experts. Citadel Securities' involvement, for instance, is expected to enhance Kraken's risk management frameworks and liquidity provision, critical for sustaining institutional-grade tokenization. Such partnerships are essential for building trust in tokenized assets, which require robust custodial and settlement systems to compete with traditional markets.

Institutional-Grade Tokenization and Global Market Integration

The institutional-grade tokenization of equities represents a paradigm shift in capital markets. Kraken's xStocks have already attracted over $5 billion in combined CEX and DEX trading volume, with onchain transactions accounting for 20% of total activity. This hybrid model-combining centralized exchange (CEX) and decentralized exchange (DEX) liquidity-addresses a key challenge in asset tokenization: ensuring deep, stable liquidity without compromising decentralization.

Moreover, Kraken's focus on open capital markets is evident in its geographic expansion. The exchange has prioritized Latin America, Asia Pacific, and EMEA regions, where regulatory sandboxes and growing crypto adoption create fertile ground for tokenized assets. By integrating tokenized equities into these markets, Kraken is fostering cross-border capital flows and reducing the friction associated with traditional equity trading.

Implications for the Future of Finance

Kraken's strategic moves signal a broader trend: the convergence of traditional and crypto markets. The exchange's ability to attract institutional capital, scale tokenized assets, and expand globally positions it as a key player in the next phase of financial infrastructure. As data from The Block highlights, Kraken's revenues have doubled since the launch of xStocks, driven by transaction fees and liquidity provision. This financial performance validates the commercial viability of tokenized equities, encouraging other market participants to follow suit.

However, challenges remain. Regulatory scrutiny, particularly in the U.S., could impact Kraken's expansion plans. Additionally, the long-term success of xStocks depends on maintaining custody transparency and addressing concerns around counterparty risk. That said, Kraken's partnerships with regulated custodians and its focus on 1:1 collateralization mitigate these risks, aligning with institutional-grade standards.

Conclusion

Kraken's acquisition of Backed Finance AG and its subsequent infrastructure consolidation represent a watershed moment for tokenized equities. By combining institutional-grade tokenization with global accessibility, the exchange is redefining open capital markets. As the $800 million funding round and xStocks' rapid adoption demonstrate, Kraken is not merely a crypto exchange but a foundational infrastructure provider for the future of finance. For investors, this evolution presents both opportunities and risks, but the trajectory is clear: tokenized assets are no longer a niche experiment-they are a core component of the next-generation financial system.