Kraken on Track: Are Tokenized Equities the Next Race for Market Infrastructure?

Kraken launches tokenized equities. international debate is fueled by market news and regulators. Capital markets shift into high gear.

A Weekend to Watch: Where Finance Meets Formula 1

As Williams Racing climbs back into the top 10 of the Formula 1 World Championship—thanks to strong technical upgrades and strategic vision—its title sponsor Kraken is racing forward too.

Kraken’s recent announcement of tokenized equities marks a concrete step toward the integration of real-world assets with blockchain infrastructure. The move allows users to purchase fractional shares of US-listed companies using stablecoins, tradable 24/7.

From racetrack telemetry to financial transactions, precision and timing make the difference. Winners are those who anticipate change and convert it into competitive advantage.

“With xStocks, we’re taking the next step: Democratizing access to equities on a global scale. We plan to steadily expand both the range of tokenized assets and the jurisdictions where xStocks are available, unlocking global access to equities markets like never before.” Kraken blog

What Is Tokenization and Why Does It Matter?

Tokenizing a financial instrument means creating a digital version of a traditional asset (e.g. a stock) recorded on a blockchain. The benefits include:

Fractional ownership for retail investors;
Real-time settlement, eliminating middlemen;
24/7 trading, breaking free from market hours.

Kraken’s tokenized equity platform, has partnered with Backed, a leading issuer of tokenized stocks, and the Solana Foundation.

They’re not alone in this push:

Robinhood is exploring blockchain-native instruments;
J.P. Morgan developed Onyx for tokenized repo transactions and real-time liquidity;
BlackRock tokenized a money market fund on Ethereum, an RWA milestone;
Wealthtechs like Zerion and Swan are enabling token-based investment flows.

Tokenization is no longer a feature. It’s the foundation of the next-gen capital market infrastructure.

Global Regulatory Landscape

The international regulatory response is intensifying.

IOSCO issued its May 2024 report titled “Policy Recommendations for Crypto and Digital Asset Markets” offering 15 strategic recommendations to:

Ensure market transparency and investor protection;
Address cross-border operational risks;
Standardize disclosures and custody frameworks.

IOSCO also raises concerns about the gamification of trading apps, warning that behavioral design features could increase financial overconfidence and excessive risk-taking.

SEC (United States): Commissioner Mark Uyeda recently emphasized that existing U.S. securities laws must adapt to accommodate innovation like tokenized assets. The SEC is reviewing possible conditional exemptions for tokenized securities while maintaining investor protection as a core priority.

FCA (United Kingdom): The FCA released Discussion Paper DP25/1, proposing a regulatory framework for cryptoasset activities and explicitly supporting the tokenization of investment funds. The UK regulator aims to balance innovation with market integrity and consumer protection.

Consob (Italy): Consob explores the legal qualification of tokenized instruments and their interaction with EU regulations such as MiCAR and the DLT Pilot Regime.

In its Legal Paper No. 32 (Jan 2025) also warns of the illusion of liquidity and the blurred boundaries between investing and entertainment, driven by UX design in token-based platforms.

Programmable Capital Markets: Code as Infrastructure

The convergence of finance, regulation, and innovation reveals a new operating system:

Capital markets are becoming programmable by design.

In programmable finance:

Rules are coded into smart contracts;
Trust is enforced algorithmically;
Assets become autonomous in function.

This shift from institutional trust to infrastructure-based compliance reshapes how capital is issued, transferred and stored.

Programmability enhances:

Transparency (everything auditable);
Efficiency (instant settlement);
User empowerment (ownership in real-time).

Yet, regulators caution that these innovations bring new behavioral and structural risks:

Over-engagement through gamified design;
Fragmented oversight across jurisdictions;
Smart contract vulnerabilities without adequate risk controls.

The future isn’t just decentralized. It’s governed by code and shaped by policy.

Conclusion: Markets in Motion, But Who Is Steering?

From Kraken to BlackRock, from IOSCO to the Consob, the signal is clear: tokenized capital markets are accelerating.

But this is not a race for speed alone. It’s about architecting new trust, new access models and new economic logic.

The real question isn’t whether tokenized finance will scale. It’s what kind of markets we choose to build and who they serve.

The checkered flag isn’t the end. It’s the start of the next innovation lap.

Slow writing, fast thinking