Kraken and Backed have announced the launch of xStocks on BNB Chain. This collaboration enables BEP-20 tokenized versions of major US stocks, offering unprecedented access and flexibility for investors worldwide, except for those in the United States, due to regulatory restrictions.

Image Source: Kraken

What is xStocks?

xStocks are blockchain-based tokens that represent shares of real-world US equities and ETFs. Each xStock is designed to track the value of its underlying asset, such as Apple (AAPLx), Tesla (TSLAx), Nvidia (NVDAx), and the S&P 500 ETF (SPYx), allowing users to gain exposure to traditional financial markets through the speed and efficiency of blockchain technology.

Why BNB Chain?

BNB Chain was selected for its:

1. High throughput and scalability: Recent upgrades have reduced block times to just 0.75 seconds, enabling faster and more reliable transactions.

2. Low fees: Cost-effective trading compared to traditional and even many blockchain-based alternatives.

3. Deep liquidity and global reach: With nearly $10 billion in total value locked and a vast user base, BNB Chain is one of the most active blockchain networks in the world.

How It Works

1. BEP-20 Token Standard: xStocks are issued as BEP-20 tokens on the BNB Chain, making them compatible with the entire BNB Chain ecosystem and DeFi protocols.

2. Deposits and Withdrawals: Eligible Kraken users can deposit and withdraw xStocks between Kraken and self-custodial wallets on BNB Chain. This enables true ownership and on-chain utility.

3. 24/7 Trading: Unlike traditional stock markets, xStocks can be traded 24/7, providing continuous market access and liquidity.

Key Benefits

1. Global Accessibility: xStocks break down geographic barriers, allowing users in 185 countries to participate in US equity markets—especially those in regions with limited access to conventional stock trading.

2. Fractional Ownership: Investors can buy fractions of high-priced stocks, democratizing access and enabling portfolio diversification for smaller investors.

3. DeFi Integration: xStocks can be used as collateral in lending protocols, integrated into derivatives, or traded within decentralized exchanges. This composability unlocks new financial products and strategies.

4. Enhanced Liquidity: Blockchain settlement ensures real-time transfers, transparent ownership records, and reduced counterparty risk. The always-on nature of xStocks increases liquidity compared to traditional equities.

Industry Impact

The launch of xStocks on BNB Chain is a significant milestone in the tokenization of real-world assets (RWAs). It reflects a growing trend among major exchanges and DeFi projects to bridge traditional finance with blockchain technology. Kraken’s move follows similar initiatives on Solana and comes as platforms like Robinhood and Bitget also roll out tokenized stock offerings.

Regulatory Considerations

It’s important to note that xStocks are not available to US persons due to regulatory constraints. However, the products are accessible to users in most other jurisdictions, with compliance measures in place to ensure responsible growth.

Future Outlook

The integration of xStocks with BNB Chain is expected to accelerate the adoption of tokenized equities, offering a glimpse into a future where traditional assets are as flexible and accessible as cryptocurrencies. As more blockchains and exchanges join this movement, the lines between traditional finance and DeFi will continue to blur, creating a more inclusive and efficient global financial system.