TheBlock
Kraken co-CEO Arjun Sethi pushed back on the idea that tokenized equities will draw a wave of institutional capital anytime soon, telling The Block at Consensus 2026 that the shift will play out over 5–10 years rather than months. Kraken's xStocks product has settled roughly $5 billion onchain since launching in June 2025, but Sethi said most of that demand is coming from fintech firms and users in emerging markets such as Mexico, Brazil, parts of Africa, and Southeast Asia — not large U.S. financial institutions.
Why it matters
Sethi's framing cuts against the dominant narrative that tokenized real-world assets (RWAs) are about to unlock Wall Street balance sheets. He argued that clearer U.S. rules would not quickly change how broker-dealers and banks handle collateral, meaning the institutional pipeline is structurally slower than crypto-native adoption curves. He also positioned tokenized equities as the natural next stage of crypto market evolution — after bitcoin, altcoins, memecoins, and stablecoins — rather than a parallel asset class competing for the same liquidity.
Market impact
Sethi said Kraken built xStocks to work across wallets like MetaMask and Phantom, DEXs, and rival exchanges such as Bybit, explicitly rejecting a walled-garden approach: "I built a tokenized equity that's permissioned, great — well, no one's using it, your customers don't care." He also flagged upcoming tokenized products tied to commodities and credit fund yields, and pointed to Kraken's recent Bitnomial acquisition — which gives it a full CFTC-licensed derivatives stack — as the foundation for eventually offering equity perpetuals to U.S. users. Sethi separately confirmed Kraken confidentially filed for an IPO last year but declined to share further details.
Frequently asked questions
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What did Kraken's co-CEO say about institutional adoption of tokenized equities?
Arjun Sethi told The Block at Consensus 2026 that adoption among large U.S. financial institutions will take 5–10 years, not 5 months, and that clearer rules won't quickly change how broker-dealers and banks handle collateral.
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How much value has Kraken's xStocks product settled onchain?
Roughly $5 billion has been settled onchain via xStocks since the product launched in June 2025, according to Sethi.
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Where is the current demand for tokenized equities actually coming from?
Sethi said most current demand is coming from fintech firms and users in emerging markets — specifically Mexico, Brazil, parts of Africa, and Southeast Asia — rather than large U.S. financial institutions.
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What upcoming tokenized products did Kraken announce?
Sethi said Kraken plans to expand beyond equities into tokenized products tied to commodities and credit fund yields, and pointed to the Bitnomial acquisition as the foundation for eventually offering equity perpetuals to U.S. users.
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Did Kraken confirm it filed for an IPO?
Sethi confirmed Kraken confidentially filed for an IPO last year but declined to share further details on timing or valuation.
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