According to PYMNTS.com, crypto exchange Kraken announced on December 2 that it is acquiring Backed, the firm behind their collaborative tokenized equities platform called xStocks. The financial terms of the deal were not disclosed. The move comes after xStocks, which debuted earlier in 2025, saw what the companies call “exceptional adoption,” surpassing $10 billion in combined exchange and on-chain trading volume within just six months. Kraken co-CEO Arjun Sethi told Bloomberg the acquisition will let them integrate stocks and ETFs more deeply into their platform. This news also follows Kraken’s confidential filing for an IPO last month and its late June launch of tokenized U.S. stocks and ETFs for eligible non-U.S. clients.
Beyond The Hype
So, what’s the big deal here? Sethi’s quote is telling: “While everyone is talking about tokenized equities, we are just doing it.” He’s positioning this as execution versus speculation. And look, $10 billion in volume in half a year is a serious data point that suggests there’s real demand, not just theoretical interest. Kraken isn’t just adding a feature; it’s buying the whole factory. By acquiring Backed, it gets the technical team and the issuance platform in-house, which theoretically lets them move faster and control more of the stack. It’s a bet that tokenization of real-world assets (RWAs) is a core future revenue stream, not a side project.
How This Stuff Actually Works
Here’s the thing: tokenization is a broad term that gets thrown around a lot. In this case, we’re talking about taking a traditional asset—like a share of Apple stock or an ETF unit—and creating a digital token on a blockchain (like Ethereum) that represents ownership of that underlying asset. The benefits they tout are pretty compelling: instant settlement (no more waiting days for trades to clear), 24/7 trading, and fractional ownership. Imagine buying a piece of an Amazon share instead of the whole thing. The backing entity, Backed in this case, holds the actual, regulated securities in custody, and mints the corresponding tokens. It’s a bridge between the old, slow world of finance and the programmable world of crypto.
The Elephant In The Room: Regulation
But, and it’s a huge but, the regulatory landscape is still a minefield. As PYMNTS notes, there’s major “regulatory and legal ambiguity,” especially in the U.S. The SEC hasn’t formalized a framework for tokenized securities. That’s why Kraken’s current offering is only for non-U.S. clients. It’s a massive hurdle. Can you build a global, scalable business if you’re permanently locked out of the world’s largest financial market? Probably not. The entire play depends on regulators eventually coming to the table. Some officials have indicated a willingness to talk, but we’re miles away from clear rules. This acquisition is a bold gamble that the rules will catch up to the technology.
Kraken’s Bigger Picture
This isn’t happening in a vacuum. Kraken filed for an IPO. Going public means you need growth stories that resonate with traditional investors, not just crypto natives. Tokenized RWAs is a perfect narrative for that: it’s about bridging markets, attracting institutional money, and tapping into the multi-trillion-dollar traditional finance world. It makes Kraken look less like a volatile crypto casino and more like a diversified financial technology platform. Basically, they’re building the infrastructure for what they think finance will become. Whether they’re wildly early or perfectly timed depends almost entirely on regulators getting their act together. The tech is ready. The market seems ready. Is Washington?
