Kraken's Strategic Acquisition of Backed Finance and the Future of Tokenized Equities

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The acquisition of Backed Finance by Kraken in 2025 marks a pivotal moment in the evolution of tokenized real-world assets (RWA). By integrating Backed's expertise in tokenized equities and infrastructure into its ecosystem, Kraken is accelerating the transition of traditional financial instruments onto blockchain networks. This move not only strengthens Kraken's position as a leader in tokenized assets but also underscores the growing viability of RWA as a core investment class.

Strategic Rationale: Bridging Traditional Finance and Crypto

Kraken's acquisition of Backed Finance is driven by a clear strategic vision: to create a unified framework for the issuance, trading, and settlement of tokenized equities. The xStocks platform, which has already achieved $10 billion in trading volume within six months of its 2025 launch, now benefits from Backed's compliance infrastructure and institutional-grade capabilities. This integration allows Kraken to offer 24/7 trading, multi-chain composability, and programmable compliance, addressing key pain points in traditional equity markets.

The acquisition also aligns with Kraken's broader ambition to tokenize real-world assets. By leveraging Backed's team and technology, Kraken can rapidly deploy new asset classes, such as real estate or private credit, while maintaining regulatory compliance. As stated in Kraken's blog, this move "strengthens its vertically integrated architecture, enabling faster innovation and global expansion."

The rise of tokenized equities is a testament to the power of blockchain technology in finance.

The Rise of Tokenized Equities as a Core Investment Class

Tokenized equities are gaining traction as a bridge between traditional finance and crypto markets. According to a report, the xStocks platform's success demonstrates that tokenized equities can offer fractional ownership, faster settlement, and global accessibility-features that traditional markets struggle to replicate. For instance, tokenized U.S. Treasuries, managed by BlackRock's BUIDL fund, have already reached $2.9 billion in value, signaling institutional validation of the asset class.

The broader RWA market is also experiencing exponential growth. Data from Investax indicates that tokenized assets expanded from $15.2 billion in December 2024 to $24 billion by June 2025, an 85% year-on-year increase. This growth is fueled by advancements in blockchain infrastructure, regulatory clarity in jurisdictions like Switzerland and the EU, and the shift of institutions from pilot projects to real-world deployment.

Institutional Adoption and Measurable Impact

Institutional investors are increasingly embracing RWA tokenization. BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) saw its assets under management (AUM) surge from $615 million to $1.87 billion within a year, while Franklin Templeton's tokenized money fund reached $360 million in AUM. These figures highlight the scalability and operational efficiency of tokenized assets.

Real estate and private equity are also seeing transformative adoption. Hamilton Lane tokenized its Global Private Assets Fund, reducing investment thresholds from millions to $20,000 and enabling secondary liquidity. Similarly, a luxury hotel in New York was tokenized with a minimum investment of $1,000, democratizing access to an otherwise illiquid asset class.

Challenges and the Path Forward

Despite rapid growth, challenges remain. Legal complexity and regulatory uncertainty in key markets continue to hinder adoption. For example, the EU's Markets in Crypto-Assets (MiCA) regulations and the U.S. Securities and Exchange Commission's (SEC) evolving stance on tokenized assets are critical factors shaping the industry. Businesses must partner with legal advisors and compliance tech providers to navigate these hurdles.

Kraken's acquisition of Backed Finance addresses some of these challenges by integrating robust compliance tools into its platform. However, broader industry adoption will depend on continued regulatory clarity and infrastructure innovation.

Future Outlook: A $3 Trillion Opportunity

The potential of the RWA market is staggering. Conservative estimates project the asset tokenization market to reach $500 billion by 2030, while aggressive forecasts suggest it could grow to $3 trillion. Private credit, real estate, and ESG assets are expected to lead this expansion, with tokenized private credit already reaching $17 billion and commodities like gold and carbon credits contributing $2 billion each.

Kraken's strategic move positions it to capitalize on this growth. By accelerating xStocks' expansion and integrating RWA into its global money app, Kraken is not only enhancing its product suite but also redefining how investors access and trade real-world assets.

Conclusion

The acquisition of Backed Finance by Kraken is more than a corporate milestone-it is a testament to the maturation of tokenized equities as a core investment class. As blockchain infrastructure, regulatory frameworks, and institutional demand converge, RWA is poised to become a cornerstone of modern finance. For investors, the message is clear: tokenized assets are no longer a speculative niche but a transformative force reshaping global markets.