When stocks like Apple and Tesla become digital tokens on the Solana blockchain, a quiet but powerful financial revolution begins.
On June 30, 2025, leading global crypto exchanges Kraken and Bybit listed xStocks—a suite of tokenized assets developed by Switzerland-based Backed Finance. This marked the first time that over 60 tokenized U.S. stocks became widely available on major crypto trading platforms. Shares in giants like Tesla, Apple, and Nvidia were transformed into SPL tokens, tradable 24/7 on the Solana blockchain.
A user in Argentina can buy a Tesla token (TSLAx) and complete the trade with on-chain settlement in just 10 seconds. A student in Kenya can invest just $1 to own a fraction of an Apple share. A miner in Indonesia can use ETH as collateral to borrow a tokenized gold ETF, hedging against local currency devaluation. These scenarios, once unimaginable, are reshaping how people around the world access financial markets.
The Backed Team: From Setback to Comeback
The story of Backed Finance is one of resilience. Its three Israeli co-founders—Adam Levi, Yehonatan Goldman, and Roberto Klein—were previously core contributors to DAOstack, a project that raised $30 million in 2018 but eventually failed, with its GEN token becoming virtually worthless by 2022.
Learning from that experience, the team identified a new opportunity in 2021. Inspired by the success of stablecoins, they launched Backed Finance with a clear mission: bring traditional assets on-chain in a fully compliant way.
The team is structured around two core strengths:
- Compliance and Legal Expertise: Backed enlisted anti-money laundering specialist Angélica Sola (founder of AS COMPLIANCE) and legal expert Jerome Dickinson (holder of a Master of Laws from McGill University) to ensure regulatory robustness.
- Technical Execution: CTO Yotam Katznelson, previously with 21Shares, leads a skilled engineering team building cross-chain infrastructure.
Interestingly, growth lead David Henderson holds a master’s degree in music—a background that seems unconventional for finance but reflects the project’s aim to attract users beyond traditional investing circles.
In April 2024, Backed secured $9.5 million in a Series A funding round led by Gnosis, setting the stage for the launch of xStocks.
How xStocks Works: A Four-Step Technical Breakdown
The xStocks system balances regulatory compliance with blockchain efficiency through a carefully designed process:
1. Asset Backing
Each token is fully backed by a real stock. Backed purchases shares (e.g., Tesla stock) via Interactive Brokers and deposits them into a segregated account at Clearstream—Europe’s largest securities depository. These accounts are publicly auditable, ensuring that token holders’ rights are protected even if Backed were to face financial trouble.
2. On-Chain Tokenization
Once Clearstream confirms the shares are deposited, a smart contract on Solana automatically mints an equivalent number of tokens (e.g., TSLAx). These tokens comply with the ERC-1400 security token standard and represent a 1:1 claim on the underlying stock.
3. Multi-Channel Distribution
The tokens are listed on exchanges like Kraken and Bybit, making them accessible to users worldwide. They can also be transferred into self-custody wallets (e.g., Phantom) and used in DeFi protocols on Solana for lending, liquidity provision, or collateral—often yielding returns significantly higher than those in traditional brokerage accounts.
4. Redemption Mechanism
Users who wish to redeem tokens for actual shares must complete a KYC process. Backed then burns the tokens and instructs Clearstream to transfer the corresponding shares to the user’s brokerage account. This process typically takes 1–3 business days.
The real innovation lies in the fusion of Clearstream’s secure custody with Solana’s high-throughput blockchain. While traditional equity settlements take two days (T+2), Solana finalizes transactions in seconds, enabling a new era of efficiency.
Market Impact: New Opportunities and Risks
Trading data from the first few days revealed both excitement and challenges:
- On June 30, trading volume reached $1.338 million across 1,225 users.
- The following day, volume surged to $6.64 million, with 6,565 new users.
However, liquidity was highly concentrated. Just three tokens—TSLAx, SPYx (SPDR S&P 500 ETF), and CRCLx—accounted for 70% of all trading volume. Many smaller-cap stock tokens saw fewer than 20 trades per day, with slippage as high as 5%. This illustrates a core challenge: while popular assets attract liquidity, less-known stocks may struggle—even in a tokenized format.
Traditional brokerages are feeling the pressure. xStocks enables:
- 24/7 Trading: Weekend trading volume reached $4.7 billion—about 12% of average weekly volume in traditional markets.
- Lower Fees: Bybit charges just $0.04 per tokenized share, far below the 3–5% fees often levied by international brokers.
- New Use Cases: From Filipinos selling tokenized Apple shares to pay rent to African farmers using tokenized commodities as loan collateral—blockchain is unlocking financial flexibility at a grassroots level.
Regulatory Considerations: Walking a Fine Line
xStocks operates within a carefully constructed regulatory framework:
- Backed holds a Swiss DLT license, requiring full collateralization of all tokens.
- The company uses a Jersey Island-based special purpose vehicle (SPV) to issue tokenized bonds that track stock prices—not equity itself.
This structure allows Backed to bypass certain securities regulations and avoid stamp duties associated with share transfers. However, it also means token holders receive economic exposure without voting rights.
There are lingering risks:
- The SEC may still pursue cross-border enforcement despite geo-blocking of U.S. users.
- The legal status of tokenized assets remains uncertain in many jurisdictions.
Arbitrage traders are already exploiting pricing gaps between traditional after-hours trading and on-chain markets. For example, when Tesla shares traded at $215.30 after hours, the on-chain token was $215.90—creating a $0.60 arbitrage opportunity per share. Such activity highlights how tokenization is blurring the lines between traditional and crypto markets.
The Future of Tokenization
Tokenized securities extend far beyond stocks. Key developments include:
- U.S. Treasury Tokens: Backed and Ondo Finance offer tokenized T-bills yielding 5.3%—significantly higher than most savings accounts.
- Private Equity Tokenization: Platforms are experimenting with tokens tied to pre-IPO companies like OpenAI and SpaceX.
- Derivatives Innovation: Some exchanges now offer leveraged trading on tokenized stocks settled in USDT.
According to a Deloitte report, over 50% of Tesla’s trading volume could eventually occur on-chain. As liquidity shifts, traditional exchanges may lose pricing power to decentralized platforms.
Solving the liquidity problem remains critical. Some proposed solutions include:
- Perpetual futures contracts for stocks (“stonk perps”) that use oracle pricing.
- Cross-chain liquidity pools across Ethereum, Solana, Avalanche, and other networks.
- Incentive programs for market makers to tighten spreads.
BlackRock has predicted that tokenization could become a $16 trillion market. As real estate, carbon credits, and intellectual property migrate to blockchains, xStokens may be remembered as the breakthrough that started it all.
Frequently Asked Questions
What are xStocks?
xStocks are tokenized versions of traditional stocks (like Apple or Tesla) that trade on blockchain networks such as Solana. Each token is 1:1 backed by real shares held in custody.
How do I buy tokenized stocks?
You can purchase them on supported crypto exchanges like Kraken or Bybit. You’ll need an account, some USDT or another supported stablecoin, and in some cases, a self-custody wallet to withdraw tokens.
Are tokenized stocks regulated?
Yes, Backed operates under a Swiss DLT license and works with regulated partners. However, the regulatory status varies by country, and some markets may restrict access.
Can I vote as a shareholder if I hold tokenized stocks?
No. Most tokenized stock products only provide economic exposure to price movements. Voting rights are typically not extended to token holders.
What are the advantages over traditional stocks?
Tokenized stocks can be traded 24/7, often with lower fees, and can be used in decentralized finance (DeFi) applications for lending or earning yield.
Is this available in the United States?
Currently, xStocks and similar products are not offered to U.S. residents due to regulatory considerations. Always check local regulations before trading. 👉 Explore more trading strategies