When Apple and Tesla stocks become digital code on the Solana blockchain, a silent financial revolution has already begun.
On June 30, 2025, leading global crypto exchanges Kraken and Bybit simultaneously launched xStocks — a compliant tokenized stock product from Swiss-based platform Backed Finance. Over 60 tokenized U.S. equities made their mainstream debut on major crypto platforms, transforming shares of giants like Tesla, Apple, and NVIDIA into SPL tokens tradable 24/7 on Solana.
An Argentine investor buys Tesla’s TSLAx token, achieving full on-chain ownership in just 10 seconds. A university student in Kenya purchases 0.01 of an Apple share for $1. An Indonesian miner uses ETH as collateral to borrow a gold ETF token, hedging against local currency depreciation. These once-unimaginable scenarios are now reshaping how 8 billion people access capital markets.
The Disruptor: A Second Chance for a Fallen Team
Backed Finance’s origin story is both unconventional and compelling. Its three Israeli co-founders — Adam Levi, Yehonatan Goldman, and Roberto Klein — were previously behind DAOstack, a decentralized governance project that raised $30 million in 2018 but ultimately collapsed when its native token GEN lost nearly all value by 2022.
Yet from the ashes of failure emerged a new vision. Inspired by the success of stablecoins, the team founded Backed Finance in 2021 with a mission: bring traditional financial assets onto the blockchain in a compliant, secure way.
The team’s structure reflects a dual focus:
- Regulatory Rigor: Backed by anti-money laundering expert Angélica Sola (founder of AS COMPLIANCE) and legal advisor Jerome Dickinson (McGill Law graduate), the project is built on a foundation of compliance.
- Technical Excellence: Led by CTO Yotam Katznelson and engineers formerly from 21Shares, the tech team specializes in cross-chain infrastructure and asset tokenization.
Even more telling is David Henderson, the growth lead with a background in music — a deliberate choice signaling the project’s intent to reach non-traditional, global users. In April 2024, Backed secured $9.5 million in Series A funding led by Gnosis, setting the stage for xStocks’ explosive launch.
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How xStocks Works: Four Steps to Financial Transformation
xStocks operates like a precision-engineered system, balancing regulatory compliance with blockchain innovation.
1. Asset Anchoring – The Foundation of Trust
Backed Finance purchases real Tesla or Apple shares through regulated brokers like Interactive Brokers, then deposits them into segregated accounts at Clearstream — Europe’s largest securities depository. Each account is publicly auditable. Even if Backed fails, users’ rights to underlying assets remain protected.
2. On-Chain Mirroring – Instant Digital Conversion
Once Clearstream confirms asset custody, Solana’s smart contracts automatically mint corresponding SPL tokens like AAPLx or TSLAx. These ERC-1400-compliant tokens are pegged 1:1 to real shares but gain new utility on-chain.
3. Multi-Layer Liquidity – From Stocks to Yield Generators
Tokenized stocks aren’t just for trading. Users can move them into wallets like Phantom and deploy them across DeFi:
- Provide liquidity on Raydium
- Borrow against them on Kamino
- Earn yield up to 3x higher than traditional margin accounts
This transforms passive holdings into active financial instruments.
4. Redemption Pathway – Seamless Exit Back to Traditional Finance
Users who want physical shares can submit KYC data. Backed then burns the on-chain token and instructs Clearstream to transfer the real stock to their brokerage account — completed within 1–3 business days.
The breakthrough lies in combining Clearstream’s institutional-grade custody with Solana’s high-speed settlement (65,000 TPS). This fusion enables atomic-level alignment between digital tokens and real-world assets — a leap beyond traditional finance’s outdated T+2 settlement model.
Market Impact: A Surge in Accessibility and New Risks
The launch revealed both explosive demand and structural challenges:
- Day 1 volume: $1.34 million (1,225 users)
- Day 2 volume: $6.64 million (6,565 new users)
But liquidity is highly concentrated. TSLAx, SPYx, and CRCLx account for 70% of trading volume, while over 80% of smaller-cap stock tokens see fewer than 20 trades per day — with slippage exceeding 5%.
This imbalance highlights a key challenge: without robust liquidity incentives, long-tail assets risk becoming stranded, undermining the promise of financial inclusion.
Traditional brokers are feeling the pressure:
- Time Advantage: xStocks recorded $47B in weekend volume — 12% of traditional weekly averages
- Cost Efficiency: Bybit charges just $0.04 per share, compared to 3–5% cross-border fees at legacy firms
- Use Case Expansion: Robinhood acquired Bitstamp; Futu added Bitcoin deposits
Meanwhile, DeFi use cases are emerging organically:
- A Filipino worker pays rent using proceeds from selling AAPLx
- A Hong Kong trader uses dividends to buy NFTs
- An African farmer uses commodity-backed tokens as collateral for startup loans
These micro-financial actions are dismantling Wall Street’s century-old gatekeeping power.
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The Regulatory Tightrope
xStocks’ compliance model is a masterclass in regulatory navigation:
- Swiss DLT License: Provides legal cover under Switzerland’s progressive blockchain laws
- Jersey Island SPV: Uses bond-like instruments to avoid direct equity registration
However, analysts note a critical nuance: xStocks are not equity tokens — they’re debt instruments. Backed issues unregistered bonds that track stock prices, sidestepping stamp duty and custody regulations.
Distribution relies on Kraken’s subsidiary PDSL, which holds a Bermuda Digital Asset license for global reach.
Yet risks remain:
- SEC Jurisdiction: Despite blocking U.S. users, VPN access could trigger enforcement
- Voting Rights Gap: Token holders receive economic benefits but no shareholder voting power
This creates arbitrage opportunities — like Argentine traders exploiting price gaps between after-hours markets and on-chain prices (e.g., buying Tesla at $215.3 off-exchange, minting TSLAx, selling at $215.9 on-chain for a $0.60 profit per share).
Traditional exchanges’ information advantage is eroding.
The Future: Unlocking a $16 Trillion Market
The vision extends far beyond stocks:
- Tokenized Treasuries: Backed partners with Ondo Finance to offer U.S. Treasury yields at 5.3% APY — 4% higher than savings accounts
- Private Equity Access: Robinhood Europe lists tokenized shares in OpenAI and SpaceX
- Derivatives Innovation: Gate.io launches first-ever leveraged U.S. stock contracts priced in USDT
Market dynamics are shifting. If over 50% of Tesla shares eventually trade as tokens, pricing power could shift from NYSE order books to decentralized exchanges.
Solutions to liquidity fragmentation are emerging:
- Perpetual Contracts: Platforms like Hypeliquid offer “stonk perps” using oracle-fed prices and funding rates
- Cross-Chain Pools: Available on Ethereum, Avalanche, Base, and six other chains via aggregators like Jupiter
- Market Maker Incentives: Dynamic spreads as low as 0.5% improve off-hours liquidity
As Deloitte notes in its 2025 Tokenization Forecast, “blockchain is building a new bridge between traditional finance and digital-native generations.”
With BlackRock projecting a $16 trillion tokenized asset market by decade’s end — spanning real estate, carbon credits, and intellectual property — xStocks is just the opening chapter.
Frequently Asked Questions (FAQ)
Q: Are xStocks actual company shares?
A: No. xStocks represent debt instruments that track stock prices but do not confer ownership or voting rights in the underlying company.
Q: Can U.S. investors use xStocks?
A: Currently, U.S. users are restricted due to regulatory concerns, though access via VPN may pose legal risks.
Q: How are my funds protected if Backed Finance fails?
A: Assets are held in segregated accounts at Clearstream. Even in bankruptcy, your claim to the underlying securities remains enforceable.
Q: What blockchains support xStocks?
A: Primarily Solana (SPL tokens), with growing support across Ethereum, Avalanche, Base, and others via cross-chain bridges.
Q: Can I earn dividends from xStocks?
A: Yes. Dividends from underlying stocks are distributed proportionally to token holders after fees and taxes.
Q: How fast are transactions?
A: Most trades settle in under 10 seconds on Solana, with redemption to traditional accounts taking 1–3 business days.
👉 Explore the next frontier of tokenized assets and global financial access
The marble halls of Wall Street still stand — but the first crack has appeared. Inside data centers and mobile apps around the world, new financial behaviors are forming: micro-investing, 24/7 trading, borderless liquidity.
This isn’t just innovation — it’s a redefinition of financial freedom. And it’s only just beginning.
Core Keywords: tokenized stocks, blockchain finance, Solana DeFi, asset tokenization, decentralized trading, crypto equities, financial inclusion