Kraken Acquires Backed Finance to Bolster Tokenized Securities Offering: A Strategic Deep Dive

Kraken's acquisition of Backed Finance marks a pivotal move in the race to dominate the burgeoning tokenized securities market, bringing its xStocks platform fully under the exchange's umbrella.

In a significant consolidation within the crypto-finance intersection, U.S.-based cryptocurrency exchange Kraken has agreed to acquire Backed Finance AG, the Swiss entity behind the issuance of xStocks. This strategic acquisition, announced on Tuesday, represents Kraken's latest move to expand its suite of financial products and solidify its position in the rapidly growing realm of tokenized real-world assets (RWAs). The deal follows Kraken's initial rollout of Backed’s xStocks product to eligible European users in September and adds to a series of acquisitions the exchange has executed throughout the year. By bringing the tokenized-equities platform in-house, Kraken aims to deeply integrate issuance, trading, and settlement functionalities into its existing ecosystem, including its global money app, while planning expansions to additional blockchains and markets.

Understanding the Acquisition: Kraken and Backed Finance

Kraken is one of the world's longest-standing and largest cryptocurrency exchanges. Founded in 2011, it has established itself as a key player in digital asset trading. The exchange has been notably active in 2024, pursuing an aggressive growth strategy through acquisitions. Prior to the Backed Finance deal, Kraken acquired futures and options trading platform NinjaTrader in May, proprietary trading platform Breakout in September, and Small Exchange, a designated contract market, in October. Furthermore, Kraken submitted a confidential U.S. IPO filing in November, signaling its ambitions for further maturation and capital market access.

Backed Finance AG is a regulated issuer of tokenized real-world assets based in Switzerland. Its flagship product, xStocks, is a platform that issues tokenized versions of publicly traded equities, such as stocks and exchange-traded funds (ETFs). These tokens represent ownership of the underlying traditional securities on a blockchain. Since launching earlier this year, xStocks has offered over 60 tokenized products and recorded more than $10 billion in combined exchange and on-chain volume. The assets are currently live on the Solana and Ethereum blockchains, enabling 24/7 trading and self-custody across multiple networks.

The Strategic Rationale: Deepening Tokenized Securities Integration

The acquisition is not merely an expansion of Kraken's portfolio but a strategic effort to control and streamline a core component of its future offerings. According to the announcement, Kraken plans to integrate xStocks’ issuance, trading, and settlement more tightly into its products. This vertical integration allows Kraken to manage the entire lifecycle of these tokenized assets—from creation to secondary market trading—within its controlled environment.

A key element of this strategy is the xStocks Alliance, a network of partnered blockchains and trading venues that Kraken already operates. The acquisition will consolidate this network under direct Kraken management. The stated goal is to support broader interoperability and liquidity as more global markets begin to adopt tokenized equities. By owning the issuing entity, Kraken can more effectively set standards, ensure regulatory compliance across jurisdictions, and create a seamless user experience from its primary brokerage app to on-chain DeFi interactions. The companies did not disclose the financial terms of the deal.

Tokenized Equities: A Defining Trend of 2024

The rise of tokenized equities—digital tokens representing ownership of traditional stocks on a blockchain—has emerged as one of the most prominent trends in crypto this year. This movement bridges traditional finance (TradFi) with decentralized finance (DeFi), offering potential benefits like 24/7 trading, fractional ownership, reduced settlement times, and enhanced transparency through blockchain verification.

Kraken's move with Backed Finance is part of a larger competitive landscape. In June 2024, xStokens launched on several platforms including Bybit, Kraken itself, and various Solana-based DeFi applications. The initial lineup featured tokenized versions of major blue-chip stocks like Netflix, Meta, Coinbase, Amazon, Nvidia, McDonald’s, Apple, Tesla, and Microsoft.

Simultaneously, other major platforms have entered the arena. That same month, global trading platform Robinhood launched a layer-2 blockchain on Arbitrum and introduced tokenized stock trading for European Union users. Robinhood's platform debuted with over 200 U.S. stock and ETF tokens, tradeable 24/5 with zero commission. According to data from Dune Analytics, Robinhood now has 943 tokenized stocks and ETFs live on Arbitrum, holding a total on-chain value of approximately $10.8 million.

Market Landscape: Scale and Key Players

To understand Backed Finance's value to Kraken, it's essential to examine its position within the broader regulated tokenized securities market. Data from RWA.xyz tracks roughly $656 million in regulated tokenized public stocks across all issuers. This segment sees about $1.14 billion in monthly transfer volume and is held by approximately 118,000 holders.

Within this regulated issuer landscape, market share is concentrated among a few key players:

• Ondo Finance leads with about 52% of the market.
• Backed Finance holds the second position with 24%.
• Securitize follows with 20%.

By acquiring Backed Finance, Kraken is not just buying a technology platform; it is acquiring a top-tier market share in a high-growth asset class. This instantly positions Kraken as a major force in regulated tokenized securities alongside other crypto-native giants and traditional financial institutions exploring similar offerings.

Comparative Analysis: Platform Approaches and Relevance

The approaches taken by different platforms highlight varying strategies for capturing the tokenized securities market:

• Kraken/Backed (xStocks): Focuses on being a regulated issuer (via Backed's Swiss license) and a primary distribution/trading venue. Its multi-chain strategy (Ethereum & Solana) and establishment of the xStocks Alliance aim for broad interoperability across the crypto ecosystem.
• Robinhood: Leverages its existing massive retail user base from traditional equity trading, introducing them to crypto via its own dedicated layer-2 blockchain on Arbitrum. Its model emphasizes commission-free trading and tight integration within its own app environment.
• Ondo Finance: Currently the market leader by value locked, Ondo has focused heavily on USD yield products (like OUSG) and institutional adoption, recently expanding into public equities.

Each model has distinct advantages. Kraken's acquisition allows it to control the "minting" process of assets, potentially giving it greater flexibility on supported assets, fee structures, and cross-platform integrations compared to platforms that rely on third-party issuers.

Conclusion: Consolidation and the Future of Finance

Kraken's acquisition of Backed Finance is a definitive signal that the convergence of traditional securities and blockchain technology is moving beyond experimentation into a phase of serious commercialization and consolidation. For Kraken, this is a strategic maneuver to embed itself deeply into the value chain of tokenized assets as it prepares for a potential public listing.

The broader impact points toward an increasingly interconnected financial system where the lines between crypto exchanges and traditional brokerages continue to blur. The ability to offer seamless access to both Bitcoin and tokenized Apple stock within a single platform represents a powerful value proposition for the next generation of investors.

For readers and market observers, key developments to watch next include:

1. The speed and depth of xStocks integration into Kraken's core exchange and money app.
2. Regulatory developments in key markets like the U.S., U.K., and EU regarding the treatment of tokenized securities.
3. Whether other major crypto exchanges respond with similar acquisitions or partnerships to compete in this space.
4. The growth trajectory of on-chain volume for tokenized equities as liquidity improves.

As infrastructure matures and regulatory clarity progresses—slowly but surely—the acquisition of Backed Finance may be remembered as a pivotal moment when a major crypto exchange decisively staked its claim in the future of all asset trading