Kraken Expands European Horizons with xStocks: Tokenized Trading Revolution

Kraken has officially launched its innovative product, xStocks, into the European market, lowering the barrier for investors to engage in tokenized trades of U.S. stocks and ETFs. This strategic move marks a pivotal step in merging blockchain technology with traditional finance, offering a new gateway for European investors.

Understanding xStocks: Tokenized Equity on the Blockchain

xStocks is a cutting-edge financial product that allows users to buy and sell tokens that track the market prices of popular U.S. stocks and ETFs. These tokens are issued on blockchain protocols such as SPL or BNB and maintain a 1:1 linkage with actual stocks, though they don’t convey shareholder rights like voting or dividends. Despite this, users can trade and manage these assets via the Kraken platform or compatible third-party wallets.

Who Can Access xStocks?

The xStocks service is currently available to residents of the EU who have passed suitability assessments or hold professional investor status, as regulated by the Cyprus Securities and Exchange Commission (CySEC) under the provision of Payward Europe Digital Solutions (CY) Limited. It’s important to note that xStocks is not available to U.S. citizens and will not register under U.S. securities law.

Investment Opportunities: Launching with 60 Top Stocks and ETFs

As part of its initial rollout, Kraken xStocks offers an array of 60 investment options, including notable companies such as Tesla, Apple, and NVIDIA. This allows European investors the opportunity to participate in some of the world’s most dynamic markets from a single platform.

24/5 Trading with Plans for Weekend Expansion

Unlike traditional stock markets, xStocks enables trading 24 hours a day, five days a week, providing investors with greater flexibility. Kraken is also planning to introduce weekend trading, aiming for a 24/7 trading experience.

Accessible Investment Starting at €1

With xStocks, investors can begin trading with as little as €1, particularly benefiting those new to investing or wanting to diversify with smaller, incremental investments.

Trading Fees and Pricing Structure

xStocks purchased with USD are exempt from trading fees, while other currencies incur standard real-time rates. Each trade includes a spread, securing the quoted price.

Self-Custody and Withdrawal Options

Kraken offers a “self-custody” feature for xStocks, allowing tokens to be transferred to compatible blockchain wallets, enhancing both security and control over assets.

Dividend Reinvestment Strategy

While xStocks don’t pay cash dividends, related distributions are automatically reinvested in the same xStock, effectively increasing the holding volume.

Security and Transparency

Kraken has partnered with Backed Assets (JE) Limited to provide reserves and audit reports for xStocks. The reliance on blockchain infrastructure ensures both high security and transparency for investors.

Future Asset Conversion and Sales Flexibility

Currently, xStocks cannot be directly converted to real shares. Investors must sell xStocks for USD to reinvest in other assets. However, they can sell their xStock holdings anytime within the Kraken app, converting them back to dollar assets, or conduct over-the-counter trades on supported third-party platforms.

The introduction of xStocks underscores Kraken’s commitment to transforming how retail investors engage with global financial markets. By leveraging blockchain and tokenization, users gain unprecedented flexibility and accessibility, making participation in major markets possible even with minimal funds.