Kraken Expands Tokenized Stocks into Leveraged Trading

Crypto exchange Kraken has begun accepting select tokenized stocks and exchange-traded funds (ETFs) as collateral for futures and margin trading, allowing eligible users to open leveraged positions without selling their holdings.

The feature initially supports 10 tokenized stocks and ETFs, including Apple, Nvidia, Tesla, Strategy, the SPDR S&P 500 ETF and Invesco QQQ Trust. Eligible users can post those holdings as collateral without selling them first.

Each eligible asset is assigned a collateral haircut that reduces its lending value based on risk. Broad-market ETFs receive the lowest haircut at 10%, while more volatile stocks such as Strategy and Robinhood are discounted by 30%.

Kraken also imposed collateral limits on each asset, with broad-market ETFs capped at up to $1 million in collateral value, most individual stocks at $250,000 and tokenized gold and Circle shares at $100,000. The exchange said both collateral limits and haircuts will be reviewed periodically and remain subject to change.

The feature is available only to eligible clients outside the United States. The exchange said tokenized stocks can be used as collateral for futures trading in the European Economic Area, while margin collateral support is available in other eligible jurisdictions outside the bloc.

Related: STS Digital launches structured crypto platform with Kraken as first partner

The launch comes about a week after Kraken partnered with Maple to launch an onchain warehouse financing facility for institutional crypto lending, allowing the exchange to expand its lending business through blockchain-based structured credit.

Tokenized assets gain broader financial utility

Kraken’s move adds to a series of efforts aimed at expanding the role of tokenized real-world assets in financial markets. Recent launches have focused on using blockchain-based securities as collateral, settlement assets and components of institutional lending infrastructure.

In February, Franklin Templeton and Binance launched a program allowing institutions to use tokenized money market fund shares as trading collateral while the underlying assets remained in regulated off-exchange custody. BlackRock’s tokenized US Treasury fund, BUIDL, is also accepted as trading collateral on Binance, as well as Crypto.com and Deribit.

Earlier this week, Tradeweb executed what it said was the first real-time purchase and sale of a tokenized US Treasury settled against tokenized cash on the Canton Network.

According to RWA.xyz, tokenized real-world assets have grown to roughly $32.6 billion in distributed value, while tokenized stocks have climbed to about $2 billion from roughly $381 million a year earlier.

Source: RWA.xyz

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