Kraken's Strategic Acquisition of Backed Finance
Kraken has announced its agreement to acquire Backed Finance, the company responsible for issuing its xStocks product line. Backed Finance specializes in creating onchain versions of 71 public equities and ETFs, with each token directly corresponding to an underlying security. According to data from RWA.xyz, Backed Finance holds approximately 23% of the tokenized public stock market, positioning it as the second-largest provider in this rapidly growing sector. While the financial terms of the deal have not been disclosed, this acquisition formalizes a partnership that has seen consistent expansion over the past year.
Since the launch of xStocks, Backed Finance has provided the essential infrastructure, facilitating over $5 billion in cumulative trading volume on Kraken. The exchange initially introduced xStocks in the U.S. earlier in 2025, subsequently expanding access to Europe, and later integrating support on the Tron, BNB Chain, and Solana networks. By bringing Backed Finance in-house, Kraken aims to consolidate the operational mechanics of tokenized equities under its direct control. This integration will grant Kraken enhanced oversight of the token issuance process, custody flows, collateral rules, and the strategic expansion of tokenized assets into a wider array of trading products.
Investor Perspective on Tokenized Equities
Tokenized stocks are emerging as a significant segment for major exchanges, experiencing high trading volumes. Kraken's acquisition of Backed Finance underscores the maturation of tokenized equities, signaling that they are transitioning from experimental offerings to becoming integral components of core exchange infrastructure.
Industry-Wide Acceleration of Tokenization
Backed Finance's infrastructure is not limited to Kraken; it also supports a growing number of tokenization integrations across the wider industry. For instance, Bybit utilized Backed's technology to introduce tokenized versions of equities like Nvidia and Strategy onto Mantle's onchain ecosystem. These integrations reflect a broader and increasing demand for tokenized financial products observed throughout 2025. The conversation surrounding tokenization has also extended beyond the cryptocurrency space, with prominent figures like BlackRock's Larry Fink and Rob Goldstein suggesting that tokenization possesses the potential to fundamentally reshape markets, akin to the transformative impact of the early internet on information dissemination.
Their remarks align with a year characterized by significant interest from both retail and institutional investors in tokenized bonds, credit, treasuries, and equities. Industry projections, such as Standard Chartered's forecast that tokenized real-world assets could reach $2 trillion by 2028, with Ethereum expected to be the primary hub for this activity, highlight the substantial growth anticipated in this area. Analysts at RedStone attribute the accelerated growth this year to a rising appetite for tokenized yield products and onchain collateral, further amplified by the increasing integration of tokenized securities into lending, trading, and liquidity systems by various protocols.
Kraken's Strategic Alignment with the Acquisition
Founded in 2021, Backed Finance will continue to support its existing token offerings under Kraken's ownership. This acquisition empowers Kraken to enhance its tokenized equity functionalities across spot markets, collateral frameworks, and future product development once the integration process is complete. Kraken has been strategically building towards this objective for several years, including a significant funding round in 2025 that valued the company at approximately $20 billion, alongside preparations for a U.S. IPO, for which it had confidentially filed earlier in the year. In parallel with its IPO efforts, Kraken has executed substantial deals to broaden its regulatory scope and product portfolio. Notable among these are:
- •The acquisition of the Small Exchange, aimed at developing a U.S. derivatives platform.
- •The $1.5 billion acquisition of NinjaTrader, recognized as a landmark deal between the crypto and traditional finance sectors.
Tokenized equities are a natural fit within this expansion strategy. By assuming control over issuance and settlement through Backed Finance, Kraken can more deeply integrate tokenized stocks into its margin systems, structured products, and forthcoming derivatives offerings.
Investor Takeaway: Strengthening Kraken's Market Position
The acquisition of Backed Finance significantly strengthens Kraken's technological infrastructure in anticipation of its planned 2026 IPO. The establishment of a unified tokenization pipeline could provide the exchange with a distinct competitive advantage as an increasing number of platforms introduce onchain versions of traditional assets.
Advancing Tokenized Equities Towards Mainstream Adoption
While tokenized stocks are still considered a niche asset class, the market has seen a significant shift in momentum, driven by the maturation of underlying infrastructure and improvements in compliance frameworks. Backed's model, which ensures tokens are only issued when the corresponding underlying securities are fully held, has emerged as a highly trusted method for bridging traditional assets with onchain markets. Kraken's acquisition adds a major exchange to the growing list of entities integrating tokenized equities directly into their operational ecosystems.
Should Kraken succeed in scaling its xStocks offering globally, tokenized shares could transcend speculative trading and find broader applications in collateral utilization, liquidity routing, and multi-chain financial applications. This development aligns with the broader trend of real-world asset integrations across Decentralized Finance (DeFi). Tokenized treasuries, credit instruments, and equities are increasingly being incorporated into lending markets and rollup ecosystems, creating a positive feedback loop that encourages further migration of traditional assets onto the blockchain.