Cryptocurrency exchange Kraken met with the Securities and Exchange Commission’s newly formed Crypto Task Force to discuss the tokenization of traditional assets. The meeting, detailed in a memo, centered on a proposed trading system and the regulatory framework for its operation.
Kraken has engaged in discussions with the US Securities and Exchange Commission (SEC) regarding its intentions to expand into tokenized markets, underscoring the increasing scrutiny of one of the most rapidly growing sectors of the cryptocurrency industry.
Four representatives from Kraken’s parent company, Payward, its subsidiary, Kraken Securities, and two attorneys from Wilmer Cutler Pickering Hale and Dorr LLP were present during a meeting with SEC staff, according to a memorandum submitted on Monday.
The agenda encompassed the regulatory requirements for operating a tokenized trading system, the broader benefits of asset tokenization, and the associated framework.
Kraken Pushes SEC to Tighten Oversight of Tokenized Stocks
Traditional exchange groups and global regulators urge the SEC to increase oversight of tokenized stocks, citing a lack of investor protections prevalent in regulated markets. Consequently, the meeting is taking place.
Unlike traditional equities, tokenized securities can be traded continuously, evading the same disclosure and reporting regulations frequently.
Kraken’s tokenized stock service was introduced on May 22, enabling non-U.S. investors to trade US equities anytime.
On June 30, Robinhood, a competitor platform, introduced a comparable product in the European Union. Kraken extended its tokenized stock offering to the Tron blockchain on Wednesday.
Although the market is still tiny, it is garnering attention.
The total value of tokenized stocks is $360 million, an 11% decrease from the previous month, as reported by RWA.xyz. However, this still accounts for only 1.35% of the $26.5 billion in tokenized real-world assets presently onchain.
If even 1% of the global equities market is tokenized, the sector could reach over $1.3 trillion, according to Binance Research.
Kraken is placing a wager on this expansion. According to a recent survey conducted by the exchange, 65% of US investors active in equities and crypto anticipate that digital assets will outperform stocks over the next decade.
Tokenized Real-World Assets May Unlock $400T TradFi Market
According to a recent study by Animoca Brands, a digital property firm based in Web3, the tokenization of RWAs can potentially unleash a $400 trillion traditional finance market.
According to Andrew Ho and Ming Ruan, researchers at Animoca, the global market for private credit, treasury debt, commodities, stocks, alternative funds, and bonds offers a substantial opportunity for development.
“The potential growth runway for RWA tokenization is underscored by the estimated $400 trillion addressable TradFi market,” they wrote.
In the interim, the 2025 Skynet RWA Security Report anticipates that the market for tokenized RWAs will reach $16 trillion by 2030.
Most of the activity is expected to be driven by short-term government bonds, with tokenized US Treasuries alone expected to reach $4.2 billion this year.
Institutional interest is increasing, as major banks, asset managers, and blockchain-native firms are investigating tokenization for liquidity and yield management.
Skynet emphasized the potential of emergent use cases in private credit, trade finance, and money market funds, noting that regulatory frameworks in the United States, Singapore, and Hong Kong could further facilitate adoption.
The report also identified significant obstacles, such as the absence of standardized risk controls, inconsistent legal treatment across jurisdictions, and sparse secondary market liquidity.