Kraken ignites a revolution: 24-hour trading. Is this the end of traditional stock exchanges?

On May 22, 2025, the US cryptocurrency exchange Kraken announced that it will launch a revolutionary product " ‌ xStocks ‌" for non-US customers in Europe, Latin America, Africa and Asia - a tokenized version of more than 50 US stocks and ETFs based on the Solana blockchain.

Users can achieve seamless trading of stocks, cryptocurrencies, funds, bonds and fiat currencies on the same platform, supporting ‌

Behind this financial innovation is a fierce collision between the traditional capital market and Web3.0, which may even become the "doomsday countdown" of traditional stock exchanges.‌. This article deeply analyzes the "dimensionality reduction" logic of xStocks from six dimensions: market structure, asset tokenization, ownership revolution, DeFi ecology, exchange competition and regulatory challenges.

1. Seamless trading of all assets: the first shot of dimensionality reduction

Kraken xStocks converts traditional assets such as stocks and ETFs into blockchain tokens, completely opening up cross-border barrier-free transactions among fiat currencies, cryptocurrencies and securities.

Traditional securities trading relies on the collaboration of brokers, custodians and clearing institutions, and is subject to T+2 settlement cycles, cross-border exchange costs and trading hours restrictions (limited to US stock trading hours). xStocks, through Solana on-chain matching and instant settlement, reduces cross-border friction costs to zero, and drives the market structure towards "all-weather, low-friction, global" (Glosten & Milgrom, 1985).

If this model becomes popular, the value chain of traditional custody banks and settlement systems will be reshaped, and blockchain technology intermediaries may become the biggest winners. ‌When stock transactions are completed as instantly as sending WeChat messages, how much room for survival is left for Wall Street's "slow motion" rules? 2. 7×24 hour trading: tearing the time barrier of traditional markets 2. xStocks’ 24/7 trading directly breaks through the “time hegemony” of traditional finance. Investors can adjust their positions in real time when financial reports are released, geopolitical conflicts or sudden decisions of the Federal Reserve are made, thereby improving price discovery efficiency. But hidden dangers also emerge - continuous trading may encourage short-term speculation and noise trading (Madhavan, 2000), and even lead to increased market volatility. To this end, xStocks needs to design an on-chain volatility control mechanism (such as dynamic handling fees and circuit breaker rules), otherwise it may fall into the paradox of "the higher the liquidity, the more uncontrollable the risk".

‌When the New York Stock Exchange closes, your U.S. stock holdings are still jumping on the blockchain - is this freedom or out of control? ‌

3. Web3.0 Ownership Revolution: Your Private Key, Your Stock

xStocks gives users ‌“Absolute Ownership on the Chain”‌: Tokens are directly stored in personal wallets, private keys are controlled independently, and the control of centralized custodians is completely eliminated. Compared with traditional securities accounts, users can prove their positions without trusting third parties, and can transfer xStocks to other DeFi protocols at any time.

This ‌ “Don’t Trust, Verify”” ‌ Web3.0 concept not only reconstructs the way assets are held, but also makes stocks a programmable “financial Lego” - users can use them as collateral to achieve automated liquidation, lending or derivative synthesis.

‌ If stock accounts no longer require banks, what is the value of the “safe deposit box business” of traditional financial institutions? ‌

Fourth, DeFi empowerment: from trading tools to ecological fuel

xStocks is not only an investment target, but also a high-energy fuel for the DeFi ecosystem. Users can invest it in decentralized exchanges (DEX) to participate in liquidity mining, or pledge it on lending platforms to obtain returns, and even build cross-chain arbitrage strategies through stablecoin leverage.

This ‌ “One coin for multiple uses” ‌ asset efficiency far exceeds traditional finance, and completely activates the value potential of stocks. In the future, xStocks may be combined with synthetic assets (Synths) to become the ‌ cornerstone of on-chain financial engineering ‌.

‌When stocks can be mined, borrowed, and cross-chain arbitrage, isn't the "single transaction" model of traditional brokerages the same as a primitive tool? ‌

V. Dimensionality reduction strike record: the life and death speed of traditional exchanges

Data reveals the cruel reality: In 2024, Binance's revenue will be 16.8 billion US dollars, OKX's trading volume will exceed 7 trillion US dollars, and the scale of custodial assets will crush traditional exchanges. If xStocks expands rapidly, traditional players such as the NYSE will face the triple defeat of “time, cost, and scenario”: ‌

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        • : On-chain settlement efficiency makes T+2 pale in comparison; Scenario dimension: DeFi ecosystem devours securities application scenarios. Traditional exchanges may be forced to accelerate the launch of their own tokenization services, but the logical contradiction of “centralized institutions issuing on-chain assets” may become the Achilles' heel of digital transformation.

          Sixth, regulatory game: the tightrope of innovation and compliance

          Kraken has explicitly excluded US users and actively negotiated with regulators in many countries to try to promote tokenized stocks in the ‌"Compliance Sandbox"‌. However, the fragmentation of global securities regulations (such as investor suitability and AML rules) remains the biggest obstacle.

          Although the on-chain traceability of blockchain facilitates supervision, how to coordinate cross-border judicial differences and define the legal attributes of tokenized securities still requires the support of a dynamic regulatory framework.

          ‌If the regulatory iron curtain finally falls, will this financial revolution be short-lived or a roundabout breakthrough?

          

          VII. Challenge: In the era of financial Lego, who will be kicked out of the game?

          Kraken xStocks' ambition goes far beyond trading innovation - it attempts to use blockchain to reconstruct the underlying logic of the global capital market.

          For retail investors, cross-border barriers are lowered and asset efficiency is improved; for the market, price discovery mechanisms and risk management rules are redefined; and for traditional exchanges, this ‌"dimensionality reduction attack"‌ may mean: either self-revolution or becoming a historical fossil.

          ‌When fiat currency, stocks and cryptocurrencies flow seamlessly in the same wallet, what we witness is not only technological iteration, but also an epic migration of power from Wall Street to blockchain. ‌ The only question is: How much time do the overlords of the old world have left to turn around?