Kraken introduces round-the-clock perpetual trading for tokenized U.S. equities in a crypto format.

The cryptocurrency exchange is bridging the gap between U.S. stocks and the crypto ecosystem, enabling users to trade derivatives of tokenized stocks continuously and with 20x leverage.

Kraken (modified by CoinDesk)

Key points:

• Kraken asserts it is the pioneer in introducing regulated perpetual futures for tokenized stocks.
• This initiative extends the thriving and prevalent derivatives model of crypto to conventional equities.
• The contracts are available for trading around the clock with leverage up to 20x, providing capital-efficient access for non-U.S. investors, as stated by Kraken.

Kraken, a cryptocurrency exchange, is introducing what it describes as the inaugural regulated perpetual futures contracts linked to tokenized stocks, according to an announcement made to CoinDesk.

The offerings, accessible to qualifying non-U.S. users in over 110 nations, mirror digital representations of prominent U.S. stocks, indices, and a gold ETF, building on the tokenized equities capabilities from xStocks, which Kraken acquired in December.

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Initial offerings include tokenized representations of the S&P 500, the Nasdaq 100, Apple, Nvidia, Tesla, and SPDR’s gold ETF (GLD), as stated by the firm.

Kraken’s initiative is significant as perpetual trading has seen rapid expansion, dominating the realm of crypto derivatives. Blockchain-based decentralized exchanges recorded over $600 billion in perpetual trading volume in January, with Hyperliquid claiming the largest market share at $200 billion monthly volume, as indicated by data from The Block.

In contrast to traditional futures contracts, perpetual contracts do not have an expiration date, trade continuously, and allow users to leverage their trades. Investors prefer these for their constant accessibility, capital efficiency, and the flexibility to engage in long or short positions at any moment.

With this development from Kraken, the structure extends to various asset classes like equities. The underlying xStocks tokens are entirely collateralized and supported on a 1:1 basis by the referenced assets, according to the company. This provides a pricing reference even when U.S. exchanges are not operational. The tokenized stocks are available for trading around the clock and allow leverage of up to 20x.

"This exemplifies what occurs when traditional markets are reimagined for a crypto-centric, always-accessible environment, arriving at a crucial time given the volatility across all markets," remarked Mark Greenberg, Kraken’s global head of consumer, in a statement.

"Regulated tokenized equities as perpetual futures signify a new era for global capital markets, where equities, indices, and commodities can trade with the same speed, accessibility, and adaptability as crypto through tokenization, enhancing risk management capabilities," he continued.

Kraken has indicated plans to broaden its offerings with additional tokenized stocks and ETFs in the upcoming months.

Competing tokenization entity Ondo Finance also revealed earlier this month its intentions to initiate perpetual trading with its own tokenized stocks.

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