Kraken, one of the leading cryptocurrency exchanges, has initiated discussions with the US Securities and Exchange Commission’s (SEC) Crypto Task Force to explore the potential integration of tokenization into regulated financial markets. The exchange recently met with the task force on Aug. 25 to present proposals on how tokenized trading systems could operate within the framework of existing US laws.
In an internal memo released by the agency, Kraken outlined the structure of a tokenized trading system, detailed the lifecycle of different transaction types, and delved into the legal obligations related to securities regulations. The exchange also emphasized the need for clearer regulatory guidance, emphasizing that well-defined oversight could foster innovation while protecting investors.
This engagement comes on the heels of Kraken’s introduction of “xStocks,” a platform designed to issue tokenized versions of over 50 US equities and exchange-traded funds. These assets are currently available on Solana and the Binance-backed BSC blockchain, although they are currently only accessible to offshore clients.
The timing of this dialogue reflects a broader industry trend towards real-world asset (RWA) tokenization. Advocates argue that tokenizing traditional assets like bonds and equities on the blockchain could democratize access to investment opportunities and reduce costs for market participants. This viewpoint has garnered support from US regulators as well, with Federal Reserve Vice Chair for Supervision Michelle Bowman highlighting the potential benefits of asset tokenization in improving the efficiency of wholesale payments.
Data from analytics firm RWA.xyz indicates that tokenized assets reached $26.5 billion in August, marking a 4% increase from the previous month. The number of wallet addresses holding these tokenized assets also grew by 11% to approximately 367,000. Industry experts anticipate significant growth in the RWA sector, with the 2025 Skynet RWA Security Report projecting that tokenized RWAs could represent up to $16 trillion in value by 2030.
As the tokenization trend gains momentum, it is evident that the integration of tokenized assets into regulated financial markets could have far-reaching implications for the future of finance. Stay tuned for further developments in this rapidly evolving space.