The cryptocurrency exchange Kraken has announced its acquisition of the tokenization platform Backed Finance AG, marking another strategic move in the firm”s ongoing expansion. This acquisition aims to bolster Kraken”s efforts in promoting the adoption of tokenized assets, specifically xStocks, which represent traditional securities on blockchain networks.
Based in Cheyenne, Wyoming, Kraken disclosed this acquisition on Tuesday, emphasizing its commitment to bridging the gap between equities and decentralized finance (DeFi). The integration of Backed Finance is expected to enhance the infrastructure necessary for trading and managing tokenized assets, which have been gaining traction in recent years.
According to Kraken co-CEO Arjun Sethi, the addition of Backed Finance will significantly strengthen the platform”s architecture for open and programmable capital markets. He stated, “Unifying issuance, trading and settlement under one framework ensures the infrastructure for tokenized assets remains transparent, reliable and globally accessible.” This vision is set to lay the groundwork for a new era of market structure.
While the specifics of the transaction remain undisclosed, Kraken”s acquisition of Backed Finance follows a series of significant purchases this year as it gears up for a potential public offering. Earlier in 2023, the exchange acquired futures trading platform NinjaTrader for $1.5 billion and proprietary trading firm Breakout for an undisclosed amount.
Sethi has voiced ambitions to transform Kraken into an “institutional-grade trading platform” that allows for the trading of any asset at any time. He further remarked that the acquisition of Backed Finance goes beyond merely providing access to U.S. equities; it aims to redefine asset ownership in the digital age.
The growing interest in tokenization from traditional finance entities reflects a broader trend. Industry leaders, such as BlackRock”s Larry Fink, have highlighted the potential for tokenized assets to reshape capital markets. Notably, Franklin Templeton has been active in tokenizing assets across various blockchain platforms for several years.
As Kraken continues to advance its tokenization strategy, the acquisition of Backed Finance positions the exchange at the forefront of a rapidly evolving financial landscape, where traditional assets are increasingly represented in the digital realm.
