Kraken’s co-CEO, Arjun Sethi, has shared his vision that tokenized equities will eventually eclipse stablecoins as a key component of the cryptocurrency market. While stablecoins have firmly established themselves in the crypto landscape, Sethi believes that tokenized equities will emerge as an even more dominant force, creating a market far larger than what we see today.
In an interview with The Block, Sethi explained that stablecoins have demonstrated significant success in providing liquidity and enabling the creation of new products in the crypto space. However, he predicts that tokenized equities will bring about an even greater transformation. “Stablecoins have done a lot so far, but imagine when tokenized equities take off. These products could end up being as valuable—or more so—than stablecoins, offering countless new opportunities for investors,” Sethi said.
He envisions a future where tokenized equities could be just as common, if not more so, than today’s most prominent stablecoins like Tether. This development, according to Sethi, will create an entirely new ecosystem with additional layers such as futures and options trading. “The market is going to grow much faster, and on a larger scale, than what we’ve seen with stablecoins,” he remarked.
A significant advantage of tokenized equities, according to Kraken’s co-CEO, is their ability to operate within the 24/7 crypto ecosystem. Unlike traditional stock markets that close after hours, tokenized equities would be accessible at all times, providing investors with unprecedented liquidity and flexibility. Furthermore, tokenized assets can potentially make it easier for global investors to access U.S.-based products, which have traditionally been difficult to reach in regions like Europe or the UK.
As part of Kraken’s broader efforts to merge traditional finance with crypto, the exchange recently announced its acquisition of NinjaTrader, a retail futures platform, for $1.5 billion. This move signals Kraken’s ambition to expand into the broader financial markets, particularly equities trading. Sethi emphasized that while Kraken is branching out into multi-asset offerings, tokenized equities will remain a central part of its strategy. “We are trying to provide a full range of services, including equities trading, payments, and more, all while maintaining a deep connection with crypto,” he said.
Kraken’s recently launched Ethereum Layer 2 network, Ink, is key to this strategy. Ink is designed to facilitate the seamless integration of decentralized finance (DeFi) with traditional finance. Through partnerships with institutions like Apollo Global Management and Securitize, Kraken is already enabling tokenized access to real-world financial products such as Apollo’s Diversified Credit Fund. Sethi sees this as the first step in creating a comprehensive suite of tokenized assets, including equities and commodities, that users can trade, borrow against, or use as collateral.
Kraken isn’t stopping at tokenized equities alone. The platform also launched tokenized Bitcoin last year, allowing for greater access to the crypto asset through DeFi networks. Initially available on Ethereum and Optimism, it has now expanded to Kraken’s Ink network. “We’re removing barriers for clients who want to interact with the broader crypto market, not just through the exchange,” Sethi explained.
The competitive landscape is intensifying, with major players like Coinbase moving into new areas. Earlier this year, Coinbase partnered with DeFi lending platform Morpho to offer Bitcoin-backed loans. This move helped Coinbase hit a peak of $4 billion in total value locked on its platform, further demonstrating the growing demand for crypto-based financial products.
When asked if Kraken sees companies like Robinhood as major competitors, Sethi downplayed the notion. Instead, he sees the entire sector—crypto exchanges, DeFi platforms, and fintech firms—as working within the same ecosystem. “It’s not just about competing with other exchanges. We’re building a technology layer that enables the development of a vast range of financial applications. It’s about fostering a complete ecosystem, not just owning parts of it,” Sethi stated.
Kraken’s strategic moves reflect a broader shift in its approach, with the company positioning itself not just as an exchange but as a technology provider for a variety of financial products. Sethi emphasized that Kraken’s focus is on facilitating the growth of the entire financial ecosystem, rather than on ownership of individual products or services.
As for the possibility of Kraken going public, Sethi confirmed that the exchange is focused on transparency, with quarterly financial disclosures already in place. While Kraken has no immediate plans to list publicly, Sethi noted that the company would consider the move if it were in the best interests of its users. “If going public makes sense in the future for the benefit of our clients, we’ll do it—but for now, we are laser-focused on expanding our offerings,” he said.
With its sights set on revolutionizing the financial space, Kraken is betting on the future growth of tokenized equities and DeFi. The exchange’s efforts to bridge traditional finance and crypto are poised to reshape the landscape of digital assets, making Kraken a key player to watch in the evolving crypto ecosystem.
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