Kraken introduces tokenized stock collateral for leveraged trading positions
The platform now enables qualifying traders to pledge tokenized stocks and ETFs as collateral for margin and futures positions while maintaining ownership of their assets.
Cryptocurrency exchange Kraken has rolled out support for using certain tokenized stocks and exchange-traded funds (ETFs) as collateral for margin and futures trading, enabling qualifying traders to establish leveraged positions while retaining ownership of their underlying assets.
The new offering launches with support for 10 tokenized stocks and ETFs, covering major names like Apple, Nvidia, Tesla, Strategy, the SPDR S&P 500 ETF and Invesco QQQ Trust. Qualifying traders can pledge these assets as collateral while maintaining their positions in these securities.
Every supported asset comes with an assigned collateral haircut that decreases its value for lending purposes according to its risk profile. Broad-market ETFs are subject to the smallest haircut at 10%, whereas more volatile equities like Strategy and Robinhood face a 30% discount.
The platform has also established collateral caps for each supported asset, limiting broad-market ETFs to a maximum of $1 million in collateral value, restricting most individual equities to $250,000 and setting tokenized gold and Circle shares at $100,000. According to the exchange, these collateral caps and haircuts will undergo periodic reviews and may be adjusted over time.
This functionality is exclusively accessible to qualified clients located outside the United States. According to the exchange, tokenized stocks are available as collateral for futures trading within the European Economic Area, whereas margin collateral functionality is accessible in other qualifying jurisdictions beyond the bloc.
This rollout follows approximately one week after Kraken collaborated with Maple to introduce an onchain warehouse financing mechanism for institutional cryptocurrency lending, enabling the platform to grow its lending operations through blockchain-powered structured credit solutions.
Tokenized assets gain broader financial utility
The introduction by Kraken represents the latest in a sequence of initiatives designed to broaden the application of tokenized real-world assets within financial markets. Recent product launches have concentrated on utilizing blockchain-based securities for collateral purposes, settlement operations and as building blocks of institutional lending infrastructure.
This past February, Franklin Templeton and Binance introduced a program permitting institutions to pledge tokenized money market fund shares as trading collateral with the underlying assets staying in regulated off-exchange custody. BlackRock's tokenized US Treasury fund, BUIDL, has also been approved as trading collateral on Binance, in addition to Crypto.com and Deribit.
Just this week, Tradeweb completed what it characterized as the first real-time purchase and sale of a tokenized US Treasury settled against tokenized cash on the Canton Network.
Based on data from RWA.xyz, tokenized real-world assets have expanded to approximately $32.6 billion in distributed value, while tokenized stocks have increased to around $2 billion from approximately $381 million a year earlier.
