Crypto Stocks Just Went Global: Solana Enables Direct Trading of US Equities via xStocks

Key Takeaways

• Crypto trading platforms Kraken and Bybit launch support for xStocks, a feature allowing users to trade select US equities.
• Powered by tokenization firm Backed, xStocks puts actual, token-backed assets on-chain with regulated custodians holding the underlying shares.
• Available via centralized exchanges and the Solana blockchain, xStocks enables permissionless trading of stocks like Tesla, Nvidia, and Meta – previously entrapped in traditional financial systems.

For the first time, crypto traders might be able to swap Solana tokens for actual shares of Tesla or Nvidia, or exchange traditional stocks directly using Solana.

Backed’s xStock platform, promoted on Solana blockchain and through exchanges like Kraken and Bybit, tokenizes select US equities. Each token represents an actual share held by a regulated third-party entity in custody.

“People all over the world can now own and use a share of a tokenized stock like they would use money,” noted Kraken co-CEO Arjun Sethi.

This breakthrough diverges significantly from earlier forms of “mirrored” tokenization. xStocks provides legally-sanctioned backing – each token is back 1:1 by a corresponding actual share held by a regulated custodian. This enhances confidence, ensuring redemption possibilities.

The Advantages Matter

xStock trading offered by Backed creates distinct value propositions:

• 24/7 Trading: Available around the clock, unlike traditional US stock market hours restricted between 9:30am-4pm ET for listed equities.
• Global Access: Removes traditional geographic and broker limits to exposure in US stocks, accessible from anywhere with a Solana wallet and internet connection.
• Cost Efficiency: Eliminates traditional brokerage commissions necessary for stock trading.
• Decentralized Finance (DeFi) Integration: xStocks are fully usable tokens that can potentially fuel DeFi applications.

“According to the brokerage’s view, this isn’t just another parity token, but a passport to actual asset ownership,” commented an industry analyst adding, “The custodian backing is akin to preventing bankruptcy of the token.” This professionalized underwriting contrasts sharply with crypto lending or similar “fractional” projects without legal backing to date.

Zero-knowledge silos are trembling in the corner.

The Crypto-Hive is Buzzing

While Backed currently powers the xStock feature, analysts state this opening removes the air from traditional stock flow arguments. Other marketplaces, including Ripple Tap and OpenSea Nifty Stocks, are expected to imitate the successful xStock formula.

Consequently, the SEC-appointed Coinbase Money-Backed divisions stated this is their “holy grail” and have requested fast approvals. Legal papers from firms like KKU Law are being drafted to decipher the regulatory pathways for institutional entrants.

Meanwhile, semi-sovereign nation builder ROBINIs announced tokenized stock-rollouts to users south of the Ural, via Arbitrum. Notably, this Shortsquat theory was first uncovered by DataSampo.

Obscure memecoins look silly now. dOG/x has just lost $1M more value.

This summary reflects news disruption occurring around June 2024. Technical integrations and regulatory developments are subject to constant change.

For the first time, people all over the world can own and use a share of a tokenized stock like they would use money. You can move it, hold it, spend it, or borrow against it. All from your wallet, with no intermediaries, no borders and no delays.

Arjun Sethi, Kraken Co-CEO