Tokenized Equities Must Go Beyond ‘Wall Street on a Blockchain’

As traditional finance becomes more intertwined with blockchain technology, a Kraken executive said simply bringing traditional financial products on a blockchain won’t cut it and is not the end goal for tokenization.

Mark Greenberg, the global head of Kraken’s Consumer Business Unit, told Cointelegraph that tokenized equities must go beyond replicating Wall Street systems onchain. Instead, he said they should unlock new levels of accessibility, programmability and global reach.

He argued that it’s an opportunity to fundamentally rethink how global markets function when it comes to accessibility, programmability and user access to legacy tools.

“Tokenized equities can’t just be ‘Wall Street on a blockchain.’ That misses the point,” Greenberg told Cointelegraph. He said that equities must “feel like the internet,” which is always on, self-directed and globally accessible.

Rebuilding financial assets to be as fluid as crypto

Greenberg said that most legacy institutions underestimate how transformative the shift could be. “This isn’t just about wrapping old assets in new tech,” Greenberg told Cointelegraph. “It’s about rebuilding financial access to be as fluid and programmable as crypto.”

He added that retail users should be able to access global markets in real time, with tools once reserved for hedge funds. For developers, tokenized stocks offer a platform to build applications, much like stablecoins and DeFi protocols today.

When asked about the role of regulations in tokenization, Greenberg told Cointelegraph that Kraken believes that the future of capital markets lies in programmable and compliant open infrastructure.

On June 30, Kraken partnered with Backed Finance to launch xStocks, a product that allows users to trade more than 60 tokenized stocks.

The product, allowing users to trade stocks like Netflix, Meta and Coinbase, went live on Kraken, Bybit and several decentralized finance (DeFi) protocols on Solana.

“With tokenized equities like xStocks, we’re building base-layer systems that are permissionless and composable, while ensuring that the assets themselves adhere to clear legal frameworks,” Greenberg told Cointelegraph.

He said this approach gives users decentralization without abandoning protections that regulators are focused on. “Regulation should evolve to support this balance, not suppress it,” Greenberg added.

Related: Fees, collateral give DeFi edge as TradFi eyes crypto loans: 1inch exec

Stock tokenization on Ethereum

Apart from Kraken, the trading platform eToro plans on launching tokenized stocks. However, unlike Kraken, which uses the Solana network, the company will tokenize 100 United States stocks on Ethereum.

While companies are racing to tokenize equities, Ethereum groups are working with regulators to create industry standards for tokenized securities.

On July 21, Ethereum-aligned organizations met with the Securities and Exchange Commission to discuss standards bridging onchain technology with traditional regulatory requirements.