Kraken has begun allowing eligible users to use selected stocks, tokens and ETFs as collateral for futures and margin trading in Kraken Pro. The update gives traders a way to back up their available crypto positions without having to sell those tokenized assets first.
Summary
- Kraken allows ten xSstocks as collateral, increasing the use of capital for eligible non-US traders around the world today.
- Broad market ETFs command a hair lower, while volatility names like MSTRx and HOODx receive higher discounts.
- Related filings show Kraken moving tokenized assets into securities, money management and institutional debt products.
The exchange said 10 xStocks assets are eligible at launch. The list includes SPYx, QQQx, AAPLx, GOOGLx, TSLAx, NVDAx, HOODx, MSTRx, GLDx and CRCLx.
This feature is only available to eligible users outside of the United States. Futures collateral is available to eligible customers outside the US, including the European Economic Area. Margin collateral is available to eligible customers outside the US, outside the EEA.
Shares are tokens that get commercial use
Tokenized stocks and ETFs are blockchain-based products that track traditional securities. Kraken’s xSstocks product offers users exposure to US names such as Apple, Tesla, Nvidia and broader market ETFs through digital tokens.
Previously the xSstocks filing reported that Kraken was trying to convert token stocks into similar market trains. The product is described as offering over 60 US token stocks and ETFs, backed 1:1, with 24/5 trading.
The latest update changes the way traders can use those assets. A user holding NVDAx, for example, may retain that exposure while using the same holding to support a limited position, subject to Kraken’s rules.
Kraken said eligible xSstocks are automatically recognized as collateral wherever futures and margin trades are available on a user’s account. That means users don’t have to move assets to a different product before using them.
Haircuts and trims control the risk
Kraken applies haircuts and collateral limits to each eligible asset. Broad market ETFs such as SPYx and QQQx have a cap of 10% and a maximum collateral value of $1 million.
Most individual stocks, including AAPLx, GOOGLx, TSLAx and NVDAx, have a 20% haircut and a $250,000 margin. High volatility names like HOODx and MSTRx carry a hair of 30%, while GLDx and CRCLx have lower collateral limits.
The exchange said these restrictions and haircuts may change over time. That gives Kraken room to adjust the exposure treatment if market volatility, liquidity or risk conditions change.
Kraken also warned that power is always dangerous. The company said, “This is not a risk-free way to access power.” If the value of the security falls, users may face margin calls or liquidation.
The tokenization push continues to grow
The move fits into a broader push to bring traditional assets to crypto trading systems. A recent hackathon report said that tokenized stocks reached nearly $1.2 billion in market capitalization, while xSstocks logged more than $25 billion in total transactions.
Kraken also develops securities and debt products in addition to tokenized shares. In May, Payward and Franklin Templeton announced a partnership to bring token money market products to the Kraken platform such as collateral and money management tools.
In June, Kraken and Maple launched an institutional lending model using a remote liquidity vehicle for crypto-backed loans. That product focuses on structured credit, while the new xSstocks update focuses on broker-dealer collateral.
The result is a comprehensive trading stack where tokenized assets can do more than track prices. Meanwhile, Kraken’s new feature gives eligible users another way to manage collateral, but it also adds a risk that sellers must carefully monitor.
