Backed Finance’s tokenized stock product, known as xStocks, has officially debuted on the Ethereum network. The launch includes around 60 tokenized equities, featuring prominent companies like NVIDIA, Amazon, Tesla, Meta, and Walmart. These digital representations of stocks are structured as ERC-20 tokens on Ethereum, each backed 1:1 by the actual underlying shares. This expansion follows earlier deployments of xStocks on the Solana, BNB Chain, and Tron blockchains, with combined trading volumes across all platforms exceeding $3.5 billion [2]. Kraken, in collaboration with Backed Finance, will enable eligible clients to seamlessly deposit and withdraw xStocks directly on Ethereum, allowing for the transfer of assets between Kraken’s platform and user-controlled wallets for on-chain activities [1].
The introduction of xStocks to Ethereum is part of a wider movement to tokenize real-world assets and integrate traditional financial instruments with decentralized finance (DeFi) systems. Given Ethereum’s leading position in the DeFi sector, holding 60% of the total value locked (TVL), it is seen as a key platform for this endeavor [1]. Kraken co-CEO Arjun Sethi noted that Ethereum’s robust developer community, substantial liquidity, and widespread user base make it a logical choice. Furthermore, xStocks’ integration into Ethereum facilitates interoperability with existing decentralized applications (dApps), wallets, and protocols, broadening the potential applications of tokenized equities [3].
Despite the increasing popularity of tokenized stocks, their legal standing remains ambiguous. Experts have raised concerns that these tokens might not offer the same legal protections as traditional stock ownership, such as voting rights or direct claims to company assets. Moreover, global regulatory bodies and stock exchanges have expressed reservations regarding the absence of standardized oversight, particularly from regulatory bodies like the U.S. Securities and Exchange Commission (SEC). While proponents maintain that tokenized stocks democratize access to equities by removing conventional barriers, the regulatory landscape is still evolving and inconsistent [1].
The market for tokenized stocks has experienced steady growth, with the total market capitalization of tokenized real-world assets (RWAs) reaching $27.9 billion. Tokenized stocks represent 1.2% of this total, equating to a market cap of $342 million [1]. The expansion of xStocks across multiple blockchains reflects the growing interest in this asset class. Other platforms, including Gemini and Robinhood, have also recently introduced or explored tokenized stock offerings, indicating a broader trend towards new methods of accessing and trading financial assets.
In the future, Backed Finance and Kraken intend to continue integrating xStocks within the Ethereum ecosystem and other blockchain networks. Their collaboration aims to make tokenized equities more programmable and interoperable across various ecosystems, providing investors with increased flexibility. As the market develops and regulatory frameworks become clearer, tokenized stocks have the potential to play a significant role in global finance, particularly in enabling cross-border transactions and enhancing market accessibility [3].
Source:
[1] Tokenized Equity Product xStocks Launches on Ethereum (https://cointelegraph.com/news/xstocks-launches-ethereum-60-tokenized-stocks-nvidia-tesla)
[2] Kraken, Backed Bring Tokenized Equities Offering to Ethereum Mainnet (https://www.coindesk.com/business/2025/09/02/kraken-backed-bring-tokenized-equities-offering-to-ethereum-mainnet)
[3] xStocks launch on Ethereum (https://blog.kraken.com/product/xstocks/launch-on-ethereum)