What are xStocks and How They Work?

The stock market is increasingly moving onchain. One of the biggest developments in this space is xStocks, a range of tokenized stocks and ETFs that brings exposure to traditional equities onto public blockchains.

xStocks are designed to combine the economic exposure of traditional stocks with blockchain features such as self-custody, fractional ownership, faster settlement, and onchain transfers. As of October 2026, the xStocks ecosystem lists 1,100+ stocks and ETFs, more than $40 billion in transaction volume, and availability across 110+ countries.

But an xStock is not exactly the same thing as owning a share through a traditional brokerage. Understanding how the tokens are backed, how dividends work, and what rights holders actually receive is important before considering them.

What Are xStocks?

xStocks are blockchain-based tokens that represent the economic value of specific publicly traded stocks and ETFs.

Each xStock is backed 1:1 by the corresponding underlying security, which is held in regulated custody. The tokens are issued by Backed Assets (JE) Limited and are designed as tracker certificates rather than direct shares in the underlying company.

For example, some of the available products include:

This means an investor can gain exposure to the price movement of an underlying asset without holding the traditional share directly in a brokerage account.

How Do xStocks Work?

The basic model is relatively straightforward.

The underlying stock or ETF is held in custody, while a corresponding blockchain token is issued to represent its economic value.

The process can be simplified into four stages:

1. Underlying asset is held in custody
   The corresponding stock or ETF is held by a regulated custodian.

2. xStock is issued
   A blockchain token representing the asset is created on a supported network.

3. The token can move onchain
   xStocks can be transferred between compatible wallets and traded through supported exchanges and DeFi protocols.

4. The token tracks the underlying asset
   The value of the xStock is designed to reflect the price of the underlying stock or ETF.

The xStocks system separates the primary market, where tokens are issued and redeemed, from the secondary market, where they can trade across exchanges and onchain applications.

What Makes xStocks Different From Traditional Stocks?

The biggest difference is that xStocks are blockchain-based representations of economic exposure rather than conventional shares held in a brokerage account.

The distinction around ownership is especially important. Holding an xStock does not give the holder shareholder rights such as voting rights. Instead, the token provides economic exposure to the underlying asset.

24/7 Trading and Onchain Settlement

One of the biggest attractions of tokenized stocks is the ability to move equity exposure onto blockchain infrastructure.

Traditional stock markets have defined trading sessions. xStocks can trade on secondary markets 24/7, depending on the platform and blockchain.

This creates an important difference between the token and the underlying market.

The underlying U.S. stock market may be closed on a Saturday, but an xStock can still trade onchain. During these periods, its price is determined by supply and demand in the secondary market rather than an actively trading underlying exchange.

This does not mean the underlying stock itself is trading 24/7. It means the tokenized representation can continue trading.

Fractional Investing

xStocks are also designed to make fractional exposure easier.

The xStocks ecosystem says its assets can be purchased fractionally from as little as $1, depending on the platform offering them.

This means users do not necessarily need enough capital to purchase an entire share of a high-priced company.

For example, instead of purchasing a full share of a stock trading at several hundred dollars, a user can potentially purchase a smaller dollar amount of its corresponding xStock.

What Happens to Dividends?

xStocks do not generally pay dividends as cash directly to token holders.

Instead, dividends from the underlying asset are reflected through a rebasing mechanism. The dividends are reinvested into additional units of the same asset, increasing the holder's token balance.

Stock splits and reverse splits are also handled through the rebasing system.

This is an important difference from holding conventional shares through a brokerage, where a dividend may normally appear as cash or be handled through a separate dividend-reinvestment program.

Where Can You Use xStocks?

One of the main advantages of xStocks is that they are not limited to a single trading platform.

The tokens are designed to work across:

• Centralized exchanges

• Self-custody wallets

• Decentralized exchanges

• DeFi protocols

• Supported blockchain networks

xStocks are currently issued across networks including Ethereum, Solana, Arbitrum, Mantle, TON, Ink, BNB Smart Chain, TRON, X Layer, Optimism and Monad, with availability depending on the specific asset and network.

This opens up use cases that are difficult to replicate with conventional shares.

For example, an xStock can potentially be used as collateral in a DeFi lending protocol or supplied to a liquidity pool.

Kraken's current documentation lists examples including using TSLAx or SPYx as collateral on DeFi protocols such as Kamino and Morpho.

xStocks and DeFi

This is where tokenized stocks become more interesting than simply putting stocks on a blockchain.

Once an equity exposure is represented as a token, it can potentially interact with other blockchain-based financial applications.

For example, users can potentially:

• Hold tokenized equities in self-custody

• Trade them on decentralized exchanges

• Use them as collateral

• Lend them through DeFi protocols

• Provide liquidity

• Move them between supported chains

This effectively turns traditional equity exposure into a composable blockchain asset.

The result is a potential bridge between traditional markets and the wider onchain economy.

xStocks vs Tokenized Stocks in General

It is important to distinguish xStocks from the broader category of tokenized stocks.

Tokenized stocks are a general concept. Different companies can use different structures, custodians, jurisdictions, rights and mechanisms to create them.

xStocks is a specific tokenized-equity ecosystem.

What Are the Risks?

Tokenized stocks offer new functionality, but they also introduce risks that investors should understand.

They Are Not Traditional Shares

An xStock does not give you the same legal rights as directly owning the underlying stock.

You generally do not receive shareholder voting rights, and the token cannot simply be transferred into a traditional brokerage account.

Smart Contract and Blockchain Risk

xStocks depend on blockchain infrastructure and smart contracts. Network issues, smart contract vulnerabilities or wallet security problems can introduce risks that do not exist in exactly the same form with a traditional brokerage.

Price Differences

The token's price can temporarily differ from the underlying stock, particularly when traditional markets are closed.

Because the token can continue trading when the underlying market is shut, supply and demand can cause premiums or discounts.

Issuer and Custody Risk

The system relies on the underlying assets being properly held in custody and the issuer structure functioning as intended.

xStocks states that the underlying securities are held in segregated custody accounts and that proof-of-reserves information is available.

Regulatory Restrictions

xStocks are not universally available.

They are currently not available to U.S. persons, and restrictions also apply in several other jurisdictions including the UK, Canada and Australia. Availability depends on the user's location and the platform being used.

The Growth of xStocks

The broader tokenized-equity market has expanded rapidly as traditional financial assets move onto public blockchains.

xStocks has become one of the major participants in that market. Its current platform reports more than $40 billion in transaction volume and more than 1,100 stocks and ETFs, while its ecosystem spans exchanges, wallets and DeFi applications.

The ecosystem is also moving beyond simply tokenizing established public companies.

In 2026, xStocks expanded into tokenized IPO access, including the Ōura IPO, allowing eligible users to receive tokenized exposure from the company's first trading day.

xStocks has also expanded into new DeFi applications. Kraken introduced xStocks Vaults for assets including SPYx, QQQx and NVDAx, allowing eligible users to earn additional onchain yield while maintaining exposure to the underlying assets.

Why Tokenized Stocks Matter

The bigger idea behind xStocks is not simply putting a stock ticker on a blockchain.

It is about making financial assets portable, programmable and composable.

A traditional stock generally stays inside the financial infrastructure of a broker, clearing system and exchange.

A tokenized stock can exist in a blockchain wallet and potentially move between exchanges, wallets and DeFi applications.

That creates a different financial model where stocks can interact with stablecoins, smart contracts and other onchain assets.

For crypto users, it also provides a way to gain exposure to traditional equities without completely leaving the blockchain ecosystem.

The Future of Tokenized Stocks

Tokenized equities are still an emerging market, but the direction is becoming increasingly clear.

Crypto exchanges are adding tokenized stocks. DeFi protocols are integrating them as collateral. Wallets are supporting them. And issuers are expanding the range of equities and ETFs that can exist onchain.

xStocks is one of the clearest examples of this transition.

The long-term question is no longer simply whether stocks can be tokenized. It is whether tokenized stocks can become a meaningful part of how global financial assets are issued, traded and used.

If that happens, blockchain could evolve from being an alternative financial system into an underlying infrastructure layer for traditional markets as well.

Disclaimer: The information in this article is for general informational purposes only and does not constitute financial or investment advice. 0fiat is not liable for any losses or damages resulting from the use of any platform, asset, or information discussed. Do your own research and due diligence before investing or trading, and consider consulting a qualified financial professional.

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Frequently Asked Questions (FAQs)

What are xStocks?
xStocks are blockchain-based tokens representing the economic value of specific stocks and ETFs. Each xStock is backed 1:1 by the corresponding underlying asset held in regulated custody.

Are xStocks the same as owning stocks?
No. xStocks provide economic exposure to the underlying asset but do not provide shareholder rights such as voting rights. They are tokenized tracker certificates rather than conventional shares held through a brokerage.

Can xStocks be traded 24/7?
Yes. xStocks can trade 24/7 on supported secondary markets and onchain venues. However, primary issuance and redemption operate on a 24/5 schedule aligned with the underlying equity markets.

Do xStocks pay dividends?
Dividends from the underlying assets are reinvested into additional units of the corresponding xStock through a rebasing mechanism rather than being paid as cash dividends.

Can I hold xStocks in a crypto wallet?
Yes. xStocks are designed to be held in compatible self-custody wallets and transferred on supported blockchain networks.

Can xStocks be used in DeFi?
Yes. xStocks are permissionless onchain tokens and can be integrated with supported DeFi protocols for uses such as lending, collateral and liquidity provision.

Are xStocks available in the United States?
No. xStocks are currently not available to U.S. persons, and geographic restrictions also apply to several other countries. Availability depends on the jurisdiction and platform.

Who issues xStocks?
xStocks are issued by Backed Assets (JE) Limited. The company describes xStocks as tokenized tracker certificates backed 1:1 by the corresponding underlying equities and ETFs.