Crypto exchange Kraken has held a high-level meeting with the US Securities and Exchange Commission’s (SEC) Crypto Task Force to discuss tokenisation of traditional assets. The talks focused on how a tokenised trading system could operate within the existing regulatory framework, legal requirements, and the potential benefits of bringing real-world equities onto the blockchain.

According to a memorandum filed on Monday, SEC staff met with representatives from Payward, Inc., Kraken Securities LLC, and legal advisers from Wilmer Cutler Pickering Hale and Dorr LLP. The meeting comes as global regulators and traditional exchange associations are pressing the SEC to adopt a stricter stance on tokenised stocks, citing concerns over investor protections.

Pushback from Traditional Markets

One of the biggest concerns raised by regulators and industry associations is the lack of safeguards in tokenised markets. Unlike traditional stock exchanges, tokenised assets can be traded around the clock, without the same level of oversight or investor protection measures. This, critics argue, exposes investors to higher risks.

Despite these warnings, platforms like Kraken and Robinhood have moved ahead with tokenised stock services. Kraken launched its tokenised US equities offering on 22 May, allowing non-US investors to buy and trade American stocks 24/7. Robinhood followed on 30 June, introducing tokenised US equities trading for users in the European Union.

On Wednesday, Kraken expanded its tokenised stock product to the Tron blockchain, signalling its commitment to building out this market despite the regulatory uncertainties.

Tokenised Stocks Still in Early Stages

At present, tokenised stocks remain a small part of the broader blockchain-based Real World Asset (RWA) sector. Data from RWA.xyz shows that the total value of tokenised stocks in circulation is around $360 million, a figure that has dropped 11% in the past 30 days.

This represents just 1.35% of all tokenised RWAs, which currently amount to $26.5 billion on-chain. While these numbers may look small, the long-term opportunity is significant. A report from Binance Research suggests that if just 1% of the global equities market were tokenised, the sector could exceed $1.3 trillion in value.

Such growth would open up new levels of accessibility and liquidity, particularly for international investors who are often locked out of certain equity markets.

Investor Sentiment and Market Potential

Kraken’s own research suggests that the appetite for tokenised equities is growing. In a recent survey of 1,000 US investors active in both crypto and equities, 65% said they expect crypto to outperform traditional stocks over the next decade. This highlights a strong belief in digital assets as a long-term investment vehicle.

Mark Greenberg, global head of Kraken’s Consumer Business Unit, has argued that tokenised stocks should not simply replicate Wall Street’s existing systems on-chain. Instead, they should offer new advantages such as programmability, global reach, and enhanced accessibility.

The meeting between Kraken and the SEC could prove to be an important step in shaping the future of tokenised markets in the United States. While regulatory clarity remains a challenge, the rapid growth of tokenisation indicates that demand will only increase.

If platforms like Kraken and Robinhood succeed in demonstrating the benefits of tokenised equities, and regulators provide clear frameworks, tokenisation could transform how global markets operate, offering investors the ability to trade assets seamlessly, transparently, and without borders.