Payward, the parent company of Kraken, has substantially expanded its tokenized equities portfolio. The xStocks platform now encompasses over 200 European and UK shares, driving total assets under management past the $1.1 billion mark.
Major Expansion Beyond U.S. Markets
This recent rollout represents a distinct departure from the initial U.S.-centric focus of Kraken’s xStocks. The updated selection incorporates every component of Germany’s DAX blue-chip index—all 40 companies, including industrial leader Siemens, software developer SAP, and financial services provider Allianz. Several other notable UK- and EU-listed corporations have also been integrated, enabling eligible crypto participants to gain economic exposure to major European enterprises via blockchain tokens.
Every xStock token maintains a 1:1 backing with an underlying equity kept in custody. Nevertheless, token holders do not acquire direct legal ownership of the underlying corporations. Instead, these instruments offer economic exposure while omitting conventional shareholder perks like voting capabilities.
Availability Still Restricted
Even with this broader European push, the tokens remain barred from the United States and the United Kingdom. Availability stays restricted to qualified users located in permitted jurisdictions outside those two regions.
This development arrives on the heels of a September pact between Payward and the London Stock Exchange Group focused on tokenizing the top 100 LSE-listed firms. That project is slated for the LSE 24 platform with a tentative 2027 launch, pending required regulatory greenlights.
xStocks rely on a traditional 1:1 backed wrapper/tracker certificate framework: actual equities are purchased and secured within regulated, isolated custody accounts, after which tokens are minted on a 1:1 basis on-chain. This grants users price tracking and token self-custody without conferring legal stock ownership.
This framework is designed to merge conventional market custody safeguards with blockchain mobility and round-the-clock market access, operating separately from a standard brokerage holding.
Growing Momentum in Tokenized Equities
Surpassing $1.1 billion in assets highlights a surging appetite for on-chain avenues to conventional equities. Tokenized stock products enable continuous trading, fractionalized shares, and blockchain-based settlement—attributes that attract crypto-focused participants looking for portfolio diversification without exiting the digital asset sphere.
By incorporating a wide array of European equities, Kraken is steering xStocks toward a more international footprint. Specifically, adding the complete DAX index offers clients a streamlined method to follow Germany’s primary public corporations through one interface.
The actual shares are maintained by regulated custodians rather than Kraken or individual token owners:
- Primary custodian (U.S. stocks): Alpaca Securities LLC, a FINRA-regulated broker-dealer and SIPC member. Additional insurance protection comes via Lloyd’s of London, offering up to $175 million in aggregate coverage according to certain disclosures.
- Secondary/additional custodians: InCore Bank, alongside other entities like Maerki Baumann depending on the framework.
- Custody and trade execution for the newer European and UK equities are managed through Payward’s collaboration with GTN, a cross-border brokerage tech provider.
These shares reside in segregated accounts, ensuring they remain separate from the assets of the issuer or Kraken.
What’s Next
Future growth will largely hinge on regulatory advancements, particularly regarding the anticipated London Stock Exchange partnership. As the tokenization of real-world assets gathers momentum, systems capable of effectively linking traditional finance with decentralized infrastructure are poised to draw increased interest from both institutional and retail audiences.
At present, the inclusion of more than 200 European and UK equities stands as one of the most substantial individual expansions of a tokenized stock product to date, marking an important step forward for Kraken’s aspirations beyond conventional digital currency exchange operations.
Written by
Yuki Yamamoto
