Imagine it’s Saturday afternoon. You’re reading the news, you have a brilliant idea, and you decide you want to buy a single share of Apple stock. You open your brokerage app, tap the screen, and… nothing. You’re told the market is closed and you’ll have to wait until 9:30 a.m. on Monday. In a world of instant downloads and 24/7 food delivery, the global financial system still keeps bankers’ hours. It feels a bit like finding a blockbuster video store still open for business, doesn’t it?
The Short Version
- Kraken acquired Swiss firm Backed Finance this week.
- Tokenized assets market predicted to hit $18 trillion by 2033.
- Kraken recently raised $800 million at a $20B valuation.
A major move this week suggests those days might be numbered. Kraken, one of the oldest and largest crypto exchanges, just announced it’s buying a Swiss company called Backed Finance. The price wasn’t disclosed, but the reason for the purchase is crystal clear. Kraken wants to help tear down the wall between the old world of finance and the new world of crypto.
Backed Finance specializes in something called “tokenization.” That sounds complicated, but the idea is simple enough to explain at the kitchen table.
Turning Stocks into Casino Chips
Think of it like this. When you go to a casino, you hand the cashier a $100 bill and they give you a $100 plastic chip. That chip isn’t real money, but it *represents* that money inside the casino. You can trade it, bet with it, and cash it out for real dollars when you’re done. It’s a placeholder that’s easy to use within that specific system.
Tokenization does the same thing for real-world things, like a share of stock. Backed Finance takes a share of, say, Tesla stock, holds it securely in a vault, and then issues a digital “token” that represents that share. This token lives on a blockchain.
A blockchain is just a public record book that everyone can see but no one can change. Think of it as a Google Doc that’s shared with the entire world. Once a transaction is written down, it’s there forever. This digital token, this “casino chip” for a Tesla share, can now be traded instantly, day or night, anywhere in the world, on platforms like Kraken.
By buying Backed Finance, Kraken is essentially buying the machine that creates these digital casino chips for all sorts of real-world assets. They plan to add tokenized stocks and even Exchange-Traded Funds (ETFs) to their platform, letting people trade a piece of the S&P 500 right next to Bitcoin.
Why Bother With All This?
You might be wondering what the point is. We can already buy stocks. But the old system is surprisingly creaky and slow. When you buy a stock today, the trade doesn’t “settle” for two business days. It’s like ordering a pizza and being told the payment won’t actually go through until Wednesday.
Putting these assets on a blockchain changes a few key things:
- Speed: Trades can settle in minutes, not days. This frees up money and reduces risk for everyone involved.
- Access: The market never closes. You can trade at 3 a.m. on a Sunday if you want. It also allows for “fractional” ownership, making it easier for someone to buy just $5 worth of a very expensive stock.
- Efficiency: It cuts out many of the middlemen who take a small slice of every transaction. This could, over time, make trading cheaper.
This isn’t just a niche idea. A recent report from Ripple and the Boston Consulting Group predicts that the market for tokenized assets could be worth an incredible $18 trillion by 2033. Everyone from small startups to giant banks is trying to figure out how to get a piece of that pie.
Kraken’s co-CEO, Arjun Sethi, put it this way:
Integrating Backed into Kraken strengthens the core architecture required for open and programmable capital markets. Unifying issuance, trading and settlement under one framework ensures the infrastructure for tokenized assets remains transparent, reliable and globally accessible.
Translated from CEO-speak, he’s saying they want to build a better, faster, and more open stock market using crypto technology. They’ve already been testing the waters. A joint project between the two companies, called xStocks, has already issued over $170 million in stock tokens and seen more than $2.3 billion in trading.
Part of a Bigger Shopping Spree
This purchase isn’t happening in a vacuum. Kraken has been on an acquisition spree, getting its house in order for a potential public stock offering of its own. It’s been buying up companies that give it access to different parts of the financial world.
Earlier this year, it bought a futures platform called NinjaTrader for $1.5 billion and a derivatives venue called Small Exchange for $100 million. They also recently raised $800 million from investors, which valued the entire company at a hefty $20 billion.
Kraken isn’t just a place to buy crypto anymore. It’s building itself into a full-fledged financial institution, one that speaks the language of both Wall Street and the new digital world. This latest purchase is a huge step in bridging that gap, turning the promise of a 24/7 global market into something you might actually be able to use very soon.
