Introduction
On June 30, 2025, leading crypto exchanges Bybit and Kraken announced the listing of xStocks, a product developed by Swiss-regulated asset tokenization platform Backed Finance. These tokens represent 1:1-backed digital equities of real-world stocks, with underlying assets held by licensed custodians such as Swiss banks InCore Bank and Maerki Baumann. Issued as SPL tokens on Solana, xStocks enable 24/7 trading and instant on-chain settlement, overcoming geographical and temporal limitations of traditional equity markets. Due to compliance requirements, xStocks are currently unavailable to U.S. residents.
Core Features of xStocks
- Full asset backing: Each token is collateralized by real shares.
- Multi-chain compatibility: Supports Solana, Ethereum, Avalanche, and other major networks.
- Regulatory compliance: Approved under EU frameworks with ISIN identifiers.
Team Background
Backed Finance’s co-founders previously worked at DAOstack, a defunct blockchain project that raised ~$30M (2017–2018) but ultimately failed. In 2021, inspired by stablecoin adoption, they pivoted to tokenizing traditional assets like stocks. Key milestones:
- 2021–2022: Feasibility studies + seed funding.
- 2023: Product launch ($50M+ issuance volume).
- April 2024: $9.5M Series A led by Gnosis, with participation from Exor Seeds and Cyber Fund.
👉 Discover how Backed Finance leverages blockchain for compliant asset tokenization
Product Ecosystem
1. xStocks
- Tokenized equities: Tracks stocks (e.g., Tesla, Apple) as debt instruments (not equity).
Advantages:
- No custody licensing required (issued via SPV).
- Bearer bonds enable chain-native transfers (no stamp duty).
- Dividends distributed via token airdrops.
2. bTokens
- Short-term bonds and ETF tokens.
- Integrated with DeFi protocols (e.g., Kamino Finance, Jupiter Exchange) for lending/borrowing.
Ryan (DigiFT analyst):
"xStocks function like corporate debt, avoiding equity complexities. However, spreads (~1%) and fees (0.5%) remain high due to operational constraints."
Trading Challenges
Liquidity Issues
- Concentration: 90% of trading activity involves NVDAx, TSLAx, and SPYx.
- Low adoption: Many pools have zero liquidity or <20 trades/day.
- Exchange limitations: Bybit/Kraken enforce minimum purchase thresholds and lack stablecoin pairs.
2025 Data:
- Launch day: $1.34M volume (1,225 users).
- July 1: $6.64M volume (TSLAx dominated).
Target Audience & Value Proposition
Key Users
- Crypto-native investors seeking non-U.S. stock exposure.
Advantages vs. traditional brokers:
- ✅ Stablecoin payments
- ✅ No brokerage account
- ✅ 24/7 settlement
Future Pathways
1. Derivatives (Perpetual Contracts)
- High-leverage "stonk perps" could attract traders with volatility-driven yields.
- Decentralized platforms (e.g., Hypeliquid) offer regulatory flexibility.
2. Private Equity Tokenization
- Potential for pre-IPO shares (e.g., SpaceX, OpenAI) via DAO-governed tokens.
Conclusion
xStocks demonstrate regulatory-compliant tokenization, but liquidity gaps and niche adoption hinder scalability. Derivatives and private equity tokenization may drive the next growth phase.
FAQs
Q: Can U.S. residents trade xStocks?
A: No—Backed Finance restricts access to non-U.S. users.
Q: How are dividends handled?
A: Via token airdrops (no corporate actions).
Q: What chains support xStocks?
A: Solana, Ethereum, Avalanche, Base, and Polygon.
👉 Learn more about tokenized assets and DeFi integration