Kraken Now Accepts Tokenized Stocks and ETFs as Collateral for Crypto Trading

TLDR

• Kraken is now accepting tokenized stocks and ETFs as collateral for futures and margin trading
• Ten assets are supported at launch, including Apple, Nvidia, Tesla, and the S&P 500 ETF
• Collateral haircuts range from 10% for broad ETFs to 30% for volatile stocks like Strategy
• The feature is only available to eligible users outside the United States
• Tokenized real-world assets have grown to roughly $32.6 billion in total distributed value

Kraken has started letting users put tokenized stocks and ETFs up as collateral for leveraged crypto trades. Users no longer have to sell their stock holdings to open futures or margin positions.

Ten assets are supported at launch. These include Apple, Nvidia, Tesla, Strategy, the SPDR S&P 500 ETF, and the Invesco QQQ Trust.

Each asset gets a collateral haircut, which lowers its usable lending value based on risk. Broad-market ETFs carry a 10% haircut. More volatile names like Strategy and Robinhood are discounted by 30%.

Kraken also set collateral caps. Broad-market ETFs are capped at $1 million. Most individual stocks are capped at $250,000. Tokenized gold and Circle shares are capped at $100,000.

The exchange said these limits and haircuts will be reviewed over time and can change.

Who Can Use It

The feature is not available to US users. In the European Economic Area, eligible clients can use tokenized stocks as collateral for futures trading. In other eligible countries outside the EEA, margin collateral support is also available.

Kraken said it will review which regions have access as regulations develop.

Part of a Wider Trend

Kraken is not alone in moving in this direction. Franklin Templeton and Binance launched a similar program in February, letting institutions use tokenized money market fund shares as trading collateral.

BlackRock’s tokenized US Treasury fund, known as BUIDL, is accepted as trading collateral on Binance, Crypto.com, and Deribit.

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

The market for tokenized real-world assets has grown to roughly $32.6 billion in total distributed value, according to RWA.xyz. Tokenized stocks alone have climbed to about $2 billion, up from $381 million a year ago.

Kraken also recently partnered with Maple to launch an onchain warehouse financing facility for institutional crypto lending. That deal allows Kraken to grow its lending business through blockchain-based structured credit.

The exchange’s latest move gives tokenized stock holders a way to put idle assets to work without triggering a sale. It also adds more collateral options to the crypto derivatives market, which has traditionally relied on cash or crypto holdings.

Collateral limits and eligible assets are expected to expand as the program develops, though Kraken has not confirmed a timeline for that.

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