Kraken has held talks with the US Securities and Exchange Commission (SEC) over its plans to expand into tokenized markets, highlighting rising scrutiny of one of the fastest-growing corners of crypto.
Key Takeaways:
- Kraken met with the SEC to discuss regulatory frameworks for its tokenized trading system.
- Regulators are pressing for stricter oversight of tokenized stocks, citing weak investor protections.
- Tokenized stock markets remain small at $360M but could reach $1.3T if adoption accelerates.
A memorandum filed Monday showed SEC staff met with four representatives from Kraken’s parent company Payward, its subsidiary Kraken Securities, and two lawyers from Wilmer Cutler Pickering Hale and Dorr LLP.
The agenda included the framework for a tokenized trading system, regulatory requirements for its operation, and the broader benefits of asset tokenization.
Kraken Pushes SEC to Tighten Oversight of Tokenized Stocks
The meeting comes as traditional exchange groups and global regulators push the SEC to tighten oversight of tokenized stocks, warning that investor protections common in regulated markets are lacking.
Unlike conventional equities, tokenized stocks can be traded around the clock and often fall outside the same disclosure and reporting rules.
Kraken announced its tokenized stock service on May 22, allowing non-U.S. investors to trade U.S. equities 24/7.
Rival platform Robinhood launched a similar product in the European Union on June 30. Kraken followed up Wednesday by expanding its tokenized stock offering to the Tron blockchain.
The market remains small but is attracting attention.
According to RWA.xyz, the total value of tokenized stocks stands at $360 million, down 11% over the past month, yet this still represents only 1.35% of the $26.5 billion in tokenized real-world assets currently onchain.
Binance Research has projected the sector could reach more than $1.3 trillion if even 1% of the global equities market is tokenized.
Kraken is betting on that growth. A recent survey by the exchange found that 65% of U.S. investors active in both equities and crypto believe digital assets will outperform stocks over the next decade.
Tokenized Real-World Assets May Unlock $400T TradFi Market
In a recent research, Web3 digital property firm Animoca Brands said that tokenization of RWAs could unlock a $400 trillion traditional finance market.
Animoca researchers Andrew Ho and Ming Ruan said the global market for private credit, treasury debt, commodities, stocks, alternative funds, and bonds represents a vast runway for growth.
“The estimated $400 trillion addressable TradFi market underscores the potential growth runway for RWA tokenization,” they wrote.
Meanwhile, according to the 2025 Skynet RWA Security Report, the market for tokenized RWAs could grow to $16 trillion by 2030.
Tokenized U.S. Treasuries alone are projected to reach $4.2 billion this year, with short-term government bonds driving most of the activity.
Institutional interest is accelerating, with major banks, asset managers, and blockchain-native firms exploring tokenization for yield and liquidity management.
Skynet highlighted emerging use cases across private credit, trade finance, and money market funds, noting that regulatory frameworks in Hong Kong, Singapore, and the U.S. could further support adoption.
The report also flagged key hurdles, including thin secondary market liquidity, inconsistent legal treatment across jurisdictions, and the absence of standardized risk controls.
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