Kraken Launches Digital Tokens To Offer 24/7 Trading of US Equities (reuters.com) 14
Kraken is launching tokenized versions of U.S. equities for 24/7 trading outside the U.S., giving global investors blockchain-based access to major companies like Apple and Tesla. Reuters reports: Tokenization refers to the process of issuing digital representations of publicly-traded securities. Instead of holding the securities directly, investors hold tokens that represent ownership of the securities. The tokens' launch outside the U.S. comes amid growing interest in blending traditional finance with blockchain infrastructure. While tokenized securities have yet to gain widespread adoption, proponents say they hold the potential to significantly reshape how people access and invest in financial markets.
In a January opinion piece for the Washington Post, Robinhood CEO Vlad Tenev said tokenization could also allow retail investors to access private companies' stocks. Kraken's tokens, called xStocks, will be available in select markets outside the United States, it said, without naming the markets. The move was earlier reported by the Wall Street Journal. The offering is currently not available for U.S. customers.
In a January opinion piece for the Washington Post, Robinhood CEO Vlad Tenev said tokenization could also allow retail investors to access private companies' stocks. Kraken's tokens, called xStocks, will be available in select markets outside the United States, it said, without naming the markets. The move was earlier reported by the Wall Street Journal. The offering is currently not available for U.S. customers.
It's a PR piece (Score:2)
COULD
This sounds like an index tracking fund. So how do they squeeze dollars out of thin air to buy shares on a stock market?
Re: (Score:1)
Not the best idea (Score:2)
- How are you going to verify that the digital token is actually tied to a share of stock?
- Can i buy 100 shares of a large slow company, like AT&T, then let this company create tokens for them and receive a 'rental' payment each month for 'lending out' my shares? This is already done for stocks which are hard to find for selling short. (Excluding the naked short selling of more shares than are available.)
- Many large companies are already traded 24x7 by listing on the US, US extended hours, US overn
Re: (Score:2)
This is what I'm curious about. Is it an actual stock piece, or a promise of a stock piece, which can disappear into the void by a rug pull.
Then, there are the "gas" fees. It might be more expensive to trade the wrapped tokens than the actual stocks.
Finally security. If someone dumps my stock portfolio, I have some protection. Someone dumps a wallet, I have zero protection. Wallets are a lot harder to secure than most people think, as you need a non-custodial wallet on hardware, with backups of the mne
How about ... (Score:1)
... a closed-end mutual fund that trades on a 24/7 market?
Or better yet, the actual underlying security trading on a 24/7 market.
Re: (Score:2)
Speculators are totally fine with 40 hour (or less) trading weeks.
1) It concentrates buyers and sellers.
2) They would like to sleep sometime.
Risky in so many ways (Score:2)
allow retail investors to access private companies' stocks
That's not going to end well. I do realize this is non-US, but just the concept is fraught. How would these retail investors know about valuing the company? How is liquidity created?
That brings me to the general suspicion of all of it though I'm curious to see it play out. Without proper market makers I would imagine bid/ask spreads to be quite wide. If another crypto operator does the same thing, will there be pricing parity? I love the smell of arbitrage in the morning. Seems problematic in many ways.
Re: (Score:1)
There's zero chance this isn't a scam.
I'd say there's a low-but-non-zero chance it's not a scam.
You COULD do this legimately, with the backing of a regulated-but-non-US company or even by a reputable non-US government to back it. But why? Other than "proof of concept" or "bragging rights" there's not much in it for the non-scammy company that wants to run it, other than maybe taking a piece of the action with every trade. But existing ways of doing trades are efficient enough for both the market-managers and the buyers and sellers that this b
Essential question (Score:2)
Sort of like ADRs then? (Score:2)
So this lets non-US investors access US stocks.
And when the orange menace decides he doesn't like it and forcibly converts them to the underlying stock but doesn't allow the investor to sell their holding in the US they're stuffed, much like happened to ADR holders of Russian equities when Putin invaded Ukraine and Putin decided to require ADRs to be delisted and converted to the underlying share.
Oh, this is crypto, there is no "underlying share", you just think there is.
No one has answered the key question (Score:2)
Actually there are several unanswered questions. I read the news release. It doesn't answer the key questions either, and I'm not sure I'm going to dig any further. BUT this is what I understand at this point:
They are going to create tokens that are securities. The tokens represent fractional ownership of baskets of stocks. So that sounds like an index fund to me.
Now, how are they going to BUY the stocks? With MONEY? or with other cryptos?
I am
the internet doesn't have business hours (Score:2)
If you trade Kraken tokens, there are no business hours. It's a f*cking crypto token, it's obviously available to transact 24/7.
The bait and switch here is imagining that Kraken tokens ARE US equities. They are so obviously NOT.
This is fun. The crypto world is just a fucking tourist trap selling you powdered margaritas for double the price of a real beach hut prepared delicious margarita made with actual limes. Go and buy a bottle of tequila and a bag of limes and enjoy a real
I appreciate they use the term (Score:2)