Kraken launches xChange engine to power tokenized stock trading

The new onchain trading engine from the xStocks platform enables trading of more than 70 tokenized equities across Ethereum and Solana.

Kraken’s tokenized equities platform xStocks has launched xChange, an onchain trading engine designed to facilitate trading of tokenized stocks across the Ethereum and Solana networks.

According to the company, the system supports trading of more than 70 tokenized equities backed 1:1 by underlying shares held in custody, with prices intended to track the corresponding public market stocks.

The launch adds new trading infrastructure for tokenized equities, part of the broader tokenized real-world asset market that aims to bring traditional financial instruments such as stocks onto blockchain-based trading systems.

Kraken launched xStocks in June, offering tokenized versions of publicly traded companies issued by Backed Assets, though the products are not available to users in the United States, the United Kingdom or other restricted jurisdictions.

Since then, the platform has recorded $3.5 billion in onchain transaction volume and about $25 billion in total trading volume across exchanges, with about $225 million in tokenized assets held across about 80,000 blockchain wallets, according to company data.

The move from Kraken comes days after the exchange said its banking unit, Kraken Financial, had been granted a limited-purpose master account by the Federal Reserve Bank of Kansas City, giving it direct access to the Fedwire payments network used by banks and credit unions.

Related: Kraken introduces fixed-rate crypto loans for its Pro users

Kraken is not alone in exploring infrastructure for tokenized securities, as both crypto exchanges and traditional market operators experiment with ways to bring stocks onto blockchain-based trading systems.

In December, Coinbase announced that it plans to launch Coinbase Tokenize, an institutional platform designed to support the issuance and management of tokenized real-world assets, including equities.

About a month later, the owner of the New York Stock Exchange, Intercontinental Exchange, said it is developing a platform to support trading of tokenized securities, including stocks and exchange-traded funds. 

The proposed system would combine the exchange’s existing matching engine with blockchain-based settlement infrastructure and could support round-the-clock trading with near-instant settlement, potentially using stablecoins instead of the current one-day settlement cycle in US equity markets.

The London Stock Exchange Group has also said it is developing blockchain-based infrastructure intended to support the trading and settlement of tokenized securities such as equities and bonds.

Nasdaq, meanwhile, has proposed integrating tokenized versions of stocks and exchange-traded products into its existing trading infrastructure, a change that could increase liquidity for tokenized securities if approved by regulators.

Magazine: The debate over Bitcoin’s four-year cycle is over: Benjamin Cowen

Source: CoinTelegraph