Kraken Bolsters RWA Push with Backed Acquisition, Targets $30 Trillion Market

Kraken has agreed to acquire Switzerland-based tokenization specialist Backed Finance, marking a significant step in the exchange's strategy to expand its offering of real-world assets (RWAs) on blockchain platforms according to reports. The move comes as the market for tokenized RWAs accelerates, with the RWA tokenization market growing by 380% in three years to reach $24 billion this month. Kraken plans to integrate Backed's tokenized stocks and ETFs into its platform to provide global traders with greater access to traditional assets through blockchain infrastructure according to reports.

Backed Finance, which has already partnered with Kraken on its xStocks tokenized equities offering, will bring its expertise in tokenizing assets like stocks and ETFs to Kraken's ecosystem according to reports. The acquisition aligns with Kraken's broader strategy to go public, following recent purchases of U.S. futures platform NinjaTrader and derivatives trading venue Small Exchange. Kraken has also raised $800 million in a fundraising round earlier this year, valuing the firm at $20 billion.

The deal signals growing institutional confidence in blockchain-based financial infrastructure, as RWAs are projected to reach $30 trillion by 2034, according to a report by RedStone, Gauntlet, and RWA.xyz. By unifying the issuance, trading, and settlement of tokenized assets under one framework, Kraken aims to provide a transparent and globally accessible infrastructure for capital markets according to reports.

The xStocks product has already attracted significant interest, with over $170 million in tokenized stock issuance and $2.3 billion in onchain trading volume since its launch.

A Strategic Expansion in the RWA Space

Kraken's acquisition of Backed Finance is a strategic move to consolidate its position in the rapidly growing RWA tokenization market. The exchange is integrating Backed's xStocks into its broader product suite, including its global money app, Krak, allowing customers to hold and spend in tokenized equities. The tokens, which are backed one-for-one by the underlying assets, offer 24/7 trading capabilities and are live on multiple blockchains, including Solana and Ethereum according to reports.

This integration is expected to bring tokenized equities to new markets and extend their reach into everyday financial experiences, according to Kraken Co-CEO Arjun Sethi. The xStocks Alliance, a network of partners spanning blockchain foundations, trading venues, and consumer applications, is also set to expand, enhancing interoperability and liquidity for tokenized equities.

Market Reactions and Future Implications

The acquisition aligns with a broader trend as crypto and traditional finance players increasingly migrate real-world assets onto blockchain rails. According to a report from Ripple and BCG, the RWA tokenization market is expected to grow to $18 trillion by 2033. Proponents argue that tokenization offers operational efficiencies, faster settlement, and broader distribution, making it an attractive proposition for both institutional and retail investors.

In the short term, Kraken's move is likely to strengthen its position as a leader in the tokenization space. The exchange has already seen explosive growth in its tokenized stock trading, with tokenized stock trading volume surging 446% recently. By expanding its tokenization capabilities, Kraken is positioning itself to capture a larger share of the market as the industry matures.

Analysts are watching closely how Kraken's integration of Backed will affect the broader market for RWAs. With the xStocks product now offering exposure to over 60 tokenized equities and ETFs, the move could further accelerate the adoption of blockchain-based financial instruments. If successful, the acquisition may encourage other traditional financial players to follow suit, bringing more traditional assets onto blockchain infrastructure.

What This Means for Investors

For investors, the integration of Backed's tokenized assets into Kraken's platform represents an opportunity to access traditional assets in a more efficient and cost-effective manner. The 24/7 trading window allows for greater flexibility compared to traditional stock markets, which are limited to business hours. Additionally, the use of blockchain technology for settlement could reduce counterparty risk and streamline the trading process.

However, investors should remain cautious, as the RWA market is still in its early stages of development. While projections are optimistic, the market's ability to reach the projected $30 trillion by 2034 will depend on regulatory clarity, technological advancements, and continued institutional adoption. As with any emerging asset class, volatility and uncertainty remain key risks for early adopters.