Kraken Wants Wall Street on Blockchain: SEC Discussion Heats Up

The post Kraken Wants Wall Street on Blockchain: SEC Discussion Heats Up appeared first on Coinpedia Fintech News

Kraken, one of the world’s biggest crypto exchanges, has found itself in the middle of Wall Street’s next big debate: tokenized stocks. On Monday, the exchange sat down with the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force to discuss how traditional assets like stocks could be brought on-chain through tokenization.

The meeting included representatives from Kraken’s parent company Payward, its securities arm, and lawyers from WilmerHale. According to the SEC memo, the agenda focused on Kraken’s proposed tokenized trading system, the regulatory hurdles it faces, and what tokenization could mean for everyday investors.

Showing excitement, Nate Geraci, said that tokenization in the US is on the way.

“Included the legal & regulatory framework for operating a tokenized trading system in the *US*. It’s coming”.

While no decisions have been made yet, the ongoing discussions highlight a growing recognition that digital assets may soon move from the edges of finance into the mainstream.

Kraken vs SEC: Why Tokenization Matters

Tokenized stocks are digital versions of traditional equities that can trade 24/7, outside the limits of Wall Street hours. Kraken and Robinhood have already jumped in, Kraken launched its service in May, giving non-U.S. investors access to American equities, while Robinhood rolled out a similar product in Europe this summer. Kraken even expanded its offering last week to the Tron blockchain.

But global regulators aren’t all cheering. Exchange associations have been pressuring the SEC to apply tighter crypto rules, warning that these products lack the investor safeguards found in traditional markets. For the SEC, that’s the big question: how to regulate a market that never sleeps.

The Size of the Opportunity

Right now, tokenized stocks are tiny compared to global finance. Data from RWA.xyz shows the total value of tokenized equities sits at just $360 million, a drop in the bucket compared to the nearly $26.5 billion worth of real-world assets already tokenized. But the potential is massive. Binance research suggests that if just 1% of global equities were tokenized, the market could soar to $1.3 trillion.

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That’s why Kraken is betting big. A recent survey by the exchange found that 65% of U.S. investors who dabble in both crypto and stocks believe crypto will outperform equities in the next decade. Mark Greenberg, Kraken’s global consumer head, said in July that tokenized stocks should bring “accessibility, programmability, and global reach”, not just a digital copy of Wall Street.

What’s Next?

The SEC hasn’t tipped its hand on whether it will crack down or collaborate, but Kraken’s willingness to meet regulators signals it wants to be part of the conversation, not fight it. With tokenization still in its early days, the path ahead will likely determine whether this becomes a trillion-dollar breakthrough or just another crypto experiment.

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FAQs

What are tokenized stocks?

Digital versions of traditional equities that can trade 24/7 on blockchain platforms.

Why is Kraken meeting the SEC?

To discuss regulatory frameworks and hurdles for its proposed tokenized trading system.

How big is the tokenized stock market?

Currently $360M, but could grow to $1.3T if 1% of global equities are tokenized.

What’s the benefit of tokenized stocks?

They offer accessibility, programmability, global reach, and 24/7 trading outside Wall Street hours.

Kraken Wants Wall Street on Blockchain: SEC Discussion Heats Up

Kraken vs SEC: Why Tokenization Matters

The Size of the Opportunity

What’s Next?

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