Kraken co-CEO: Tokenized equities need five to 10 years

Speaking at Consensus 2026, Kraken co‑CEO Arjun Sethi told attendees that tokenized equities are unlikely to win rapid adoption at major U.S. banks and broker‑dealers and predicted a five‑ to ten‑year timeline rather than months. He said clearer U.S. rules alone will not prompt institutions to replace their existing collateral and settlement systems overnight.

Sethi said Kraken’s xStocks product has settled about $5 billion onchain since its June 2025 launch and described tokenized real‑world assets as the next stage of crypto markets following Bitcoin, Ethereum and stablecoins. He framed current demand as coming mainly from fintech firms outside the U.S., citing Mexico, Brazil, parts of Africa and Southeast Asia as active markets.

Onstage, Sethi warned that regulators’ guidance will not immediately change how broker‑dealers, banks and other large firms operate. “I don't think it's going to open the floodgates the way people think,” he said, adding that core operational and collateral systems in institutions are not poised to be swapped out quickly. He said that, for those reasons, adoption will take years: “So I think that journey takes five to 10 years. It doesn't take five months.”

Kraken designed xStocks to be interoperable across wallets, decentralized exchanges and third‑party trading platforms rather than confined to its own ecosystem. Sethi pointed to integrations with wallets such as MetaMask and Phantom and connections to DEXs and rival centralized platforms. “It shouldn't be walled gardens,” he added, arguing that a permissioned tokenized equity matters only if customers use it.

He said Kraken plans to expand tokenization beyond equities into products tied to commodities and credit fund yields to broaden the set of onchain real‑world assets available to traders and investors. Sethi confirmed Kraken’s recent acquisition of Bitnomial, which the company views as providing a full CFTC‑licensed derivatives stack that could support crypto perpetual contracts and, eventually, equity perpetuals for U.S. users.

Sethi also confirmed that Kraken filed for an initial public offering confidentially last year but declined to provide timing or structure details. On management, he described frequent internal changes to reduce layers and improve communication between co‑CEOs and teams, noting repeated redesigns of internal processes: “Even things that we built two years ago to be better co‑CEOs and de‑layer — we threw away and we redid six months ago. The things that we built six months ago, we threw away three weeks ago.”

Sethi characterized current xStocks activity as concentrated among international fintechs rather than large U.S. financial institutions, highlighting a gap between the technology’s capabilities and enterprise adoption timelines.

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