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Kraken launches round-the-clock perpetual trading for tokenized U.S. equities in a cryptocurrency format.
The cryptocurrency exchange is connecting U.S. stocks with the crypto sector, enabling users to trade derivatives of tokenized stocks around-the-clock with 20x leverage.
Kraken (modified by CoinDesk)
What to know:
- Kraken asserts it is the first to introduce regulated perpetual futures for tokenized stocks
- This initiative extends the rapidly growing and leading derivatives model of crypto to conventional equities.
- The contracts are available 24/7 with leverage up to 20x, providing non-U.S. investors with capital-efficient exposure, according to Kraken.
The cryptocurrency exchange Kraken is debuting what it describes as the first regulated perpetual futures contracts linked to tokenized stocks, as stated by the firm to CoinDesk.
The offerings, accessible to eligible non-U.S. users across more than 110 nations, mirror digital equivalents of prominent U.S. stocks, indices, and a gold ETF, building on the tokenized equities platform of xStocks that Kraken obtained 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 indicated by the firm.
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Kraken's initiative is significant as perpetual trading has experienced rapid expansion, dominating the crypto derivatives market. Blockchain-based decentralized exchanges recorded over $600 billion in perpetual trading volume in January, with Hyperliquid claiming the largest market share at $200 billion in monthly volume, according to data from The Block.
In contrast to traditional futures contracts, perpetuals do not have expiration dates and are traded 24/7, offering users high leverage options. Investors prefer them for their continuous access, capital efficiency, and the ability to take long or short positions at any time.
With Kraken's initiative, this framework is now broadened to include other asset categories such as equities. The underlying xStocks tokens are entirely collateralized and backed 1:1 by the referenced assets, as per the company. This ensures a pricing anchor even when U.S. exchanges are not operational. The tokenized stocks are traded continuously and facilitate leverage of up to 20x.
"This exemplifies how traditional markets are being restructured for a crypto-native, always-on environment, which is timely given the volatility present across all markets," stated Mark Greenberg, Kraken’s global head of consumer.
"Regulated tokenized equities as perpetual futures signify a new phase for global capital markets, where equities, indices, and commodities can trade with the same speed, accessibility, and flexibility as crypto via tokenization, providing a more comprehensive risk management experience," he further explained.
Kraken mentioned that it intends to broaden its offerings with additional tokenized stocks and ETFs in the upcoming months.
Competing tokenization company Ondo Finance also recently revealed plans to initiate perpetual trading with its tokenized stocks.
Read more: Kraken’s co-CEO could trust AI with 100% of his crypto — Dragonfly’s Haseeb Qureshi isn’t convinced
