KEY FACTS: Kraken, a leading cryptocurrency exchange, has partnered with Trust Wallet, a self-custody wallet with over 200 million users, to offer tokenized equities through Backed's xStocks, enabling seamless trading of U.S. company shares on blockchain networks like Solana, BNB Chain, Tron, and Ethereum. This collaboration allows Trust Wallet users to buy, hold, and trade up to 60 xStocks using local fiat currencies, building on Kraken’s earlier EU rollout that achieved $4 billion in trading volume. The partnership aims to bridge traditional and decentralized finance, offering retail investors global market access.
Source: Kraken
Kraken and Trust Wallet Partner to Offer Tokenized xStocks
Kraken has announced a landmark partnership with Trust Wallet, one of the world's leading self-custody crypto wallets. The collaboration aims to democratize tokenized equities, bringing them directly to the fingertips of more than 200 million users worldwide. At the heart of this initiative is Backed's innovative xStocks product, a suite of collateralized on-chain assets that mirror real-world equities, allowing seamless trading across multiple blockchain networks.
The announcement, made on a crisp Friday morning, underscores the accelerating convergence of decentralized finance (DeFi) and conventional stock markets. Kraken, positioning itself as the primary distribution partner for xStocks, described the integration as a "paradigm shift" in global finance. Users of Trust Wallet, known for its user-friendly interface and support for over 100 blockchain networks, will now be able to purchase, hold, and trade up to 60 different xStocks using a variety of local fiat currencies. Deposits and withdrawals will flow effortlessly across chains like Solana, BNB Chain, Tron, and Ethereum, eliminating the silos that have long plagued cross-network transactions.
xStocks, developed by Backed, a Swiss-based provider of on-chain real-world assets (RWAs), are essentially digital tokens backed 1:1 by underlying equities from major U.S. companies. Think of them as blockchain-wrapped shares of Apple, Tesla, or Nvidia, tradable 24/7 without the need for traditional brokers or clearinghouses.
This partnership extends Kraken's existing xStocks offerings, which were initially rolled out to eligible clients in the European Union earlier this year. Now, Trust Wallet users gain entry into this market, potentially unlocking a massive user base. Trust Wallet, acquired by Binance in 2018 and boasting over 200 million downloads, has long championed self-custody, the principle that users should control their own private keys and assets. The integration of xStocks enables Trust Wallet to evolve from a crypto-only tool into a gateway for hybrid finance.
From a technical standpoint, the integration prioritizes accessibility. Users can onboard with fiat ramps tailored to their regions, converting local currencies like euros, pounds, or emerging-market tender into xStocks with minimal fees. Cross-chain support is a standout feature, leveraging bridges and layer-2 solutions to ensure liquidity isn't trapped in one ecosystem. For instance, a trader on Solana could deposit funds, acquire tokenized shares of Microsoft, and withdraw to Ethereum for DeFi yield farming, all within the Trust Wallet app.
While Kraken's announcement trumpets access for "over 200 million users across the world," the reality is more nuanced. Tokenized equities, unlike pure cryptocurrencies, are classified as securities in most jurisdictions, subjecting them to stringent Know Your Customer (KYC) protocols, anti-money laundering (AML) checks, and investor protection mandates.
Kraken was upfront about these constraints in its disclosure, stating that xStocks are explicitly "not available in the US or to US persons," with additional geographic restrictions applying. The initial rollout excludes high-regulation markets like the United Kingdom, Canada, and Australia, focusing instead on the EU and select emerging economies. This means the touted 200 million figure likely represents Trust Wallet's total user base, not the immediately eligible pool, a detail that could temper expectations among investors eyeing rapid adoption.
Industry analysts speculate that these limitations stem from ongoing regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) has ramped up enforcement against unregistered security tokens, as seen in recent cases involving platforms like OpenSea and Impact Theory. Meanwhile, the EU's Markets in Crypto-Assets (MiCA) regulation, fully effective since June 2024, provides a clearer path for tokenized assets but demands rigorous licensing. Kraken, which secured a Virtual Asset Service Provider (VASP) license in Ireland earlier this year, is well-positioned in Europe but must tread carefully elsewhere.
Looking ahead, the Trust Wallet integration could amplify this growth exponentially. With Trust Wallet's user demographics skewed toward mobile-first markets in Asia and Africa—regions often underserved by legacy finance—the partnership taps into untapped potential. Imagine a small business owner in Nigeria trading tokenized Nvidia shares via Solana, hedging against local volatility, or a freelancer in India holding fractional Apple stock for long-term growth. Such scenarios aren't far-fetched; they've already played out in crypto's wilder corners.
This alliance between Kraken and Trust Wallet is part of a larger tokenization wave sweeping finance. BlackRock's BUIDL fund, launched on Ethereum in March 2024, has tokenized over $500 million in treasuries, while Societe Generale's EURCV stablecoin experiments with equity wrappers. Even central banks are dipping their toes. The Monetary Authority of Singapore tested tokenized bonds in 2024, hinting at institutional buy-in.
For users, the benefits are lower costs (no middlemen), global access (bypassing currency controls), and innovation (programmable stocks). But challenges loom. Scalability remains an issue. Ethereum's gas fees can spike during peaks—and oracle risks (price feeds for backing assets) could introduce vulnerabilities. Moreover, as adoption grows, so does the scrutiny from watchdogs wary of systemic risks.
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