Why Tokenization Is Non-Negotiable for Crypto Exchange Development?

Kraken is buying Backed Finance, the tokenization partner behind its xStocks offering. It wasn’t just another high-profile crypto M&A, expansion, or diversification announcement of December 2025, but an infrastructure consolidation. 

Backed Finance is one of the most mature tokenized equities platforms in the market, offering on-chain representations of real stocks. By acquiring the Swiss tokenized RWA issuer, Kraken didn’t just “add a feature” but absorbed the engine directly into the exchange core – issuance, custody, compliance, trading, and settlement under one roof.

Earlier this year, Kraken partnered with Backed Finance for its offering. But this time it wasn’t a collaboration or API integration. This distinction matters if you’re planning your cryptocurrency exchange development in 2026, as tokenization is no longer a “nice-to-have” feature for crypto exchange development.

Why Spot-Only Crypto Exchange Software Will Barely Survive in 2026?

For years now, spot (also known as buy sell exchanges) and perpetual trading engines have garnered attention, but the model is breaking. Fees have collapsed toward zero. Futures platforms are slashing rates aggressively just to stay visible and competitive. Volumes may be up, but margins for crypto exchange operators are not. Liquidity incentives and market-making expenses are also burning cash, narrowing the revenue stream for exchange owners. 

At the same time, banks and traditional brokers are entering spot crypto markets. BPCE in France and GoTyme in the Philippines started offering in-app crypto trading services recently. When banks or a regulated broker offer crypto trading inside an existing financial app, competing on “lower fees” becomes a losing game.

Trading alone no longer scales as a business.

In 2026, cryptocurrency exchange software that will survive is moving up the value chain toward:

• RWA tokenization and issuance
• Custody and settlement
• Compliance infrastructure
• Regulated secondary markets

In other words, trading is now a feature. The business owns the rails on which assets move. Kraken’s move reflects this reality. Tokenization gives crypto exchange development something fees never could: durable differentiation and institutional relevance.

What Backed Finance Actually Brings Into Kraken’s Core Stack?

Backed Finance is not a “token minting startup.” It’s a production-grade real-world asset issuance system. 

At a technical level, Backed does the following:

• Issues tokenized stocks and ETFs as ERC-20 assets

• Maintains 1:1 backing via regulated custodians

• Enables minting and redemption flows tied to real securities

• Enforces compliance at the contract and account level

It is important because institutional investors, the target audience for RWA trading infrastructures, care about the following:

• Legal enforceability
• Bankruptcy-remote custody
• Predictable redemption
• Clean audit trails

This was tried and tested by Kraken when its xStocks offering, backed by Backed, proved demand by handling billions in cumulative volume and onboarded real capital, not just DeFi enthusiasts.

By acquiring Backed, Kraken turned tokenized equities into native exchange assets, tradeable alongside the other crypto pairs and stablecoins, settled on-chain, and stored under the same governance framework.

Why Do Most Tokenization Integrations Fail at Scale?

“Tokenization Only Scales When It’s Native, Not Plugged In”

In 2025, many exchanges have experimented with tokenization as a side product. With the same approach, they won’t survive 2026 due to scalability issues. Tokenization works best when it is built inside cryptocurrency exchange software, because then:

• Tokenized assets share the same matching engine as crypto pairs.
• Custody is unified and segregated under one risk model.
• Compliance rules apply consistently across asset classes.
• Surveillance systems detect abuse across spot, crypto, and tokenized markets.

With tokenization bolted on, crypto exchange software can’t achieve the abovementioned imperatives because:

• Settlement stays fragmented.
• Reporting is manual.
• RWA custody is plugged in, not native, so not efficient
• Jurisdiction rules conflict
• Audits fail

Regulatory frameworks like MiCA and evolving SEC expectations don’t tolerate silos. They demand atomic settlement, traceable issuance, and end-to-end accountability.

Kraken’s acquisition of a well-built tokenization platform solves this by accommodating issuance, custody, compliance, and trading into a single control pane. Not because both trading and tokenization engines sit in the same UI, but because ownership changes how the stack is controlled, governed, and eventually merged. It means one decision-maker, one compliance brain, and one settlement authority.

The New Reference Infrastructure: Crypto Exchange Software + In-Built Tokenization Engine

At a high level, the ideal tokenization+trading architecture for the upcoming cryptocurrency exchange software development projects includes:

1. Core Exchange Engine

• Spot, derivatives, and OTC markets
• Unified order books across asset classes
• High-throughput matching for tokenized assets

2. Token Issuance & Lifecycle Management

• On-chain minting and burning
• Asset-level metadata and disclosures
• Automated redemption workflows

3. Custody Layer

• MPC-based wallets
• Asset segregation and bankruptcy protection
• Jurisdiction-aware custody controls

4. Compliance & Governance Layer

• KYC/AML enforced at the account and asset level
• Geo-restrictions and regulatory permissions
• Real-time monitoring and reporting

5. Liquidity & Yield Infrastructure

• Market-making for tokenized assets
• Yield routing (e.g., securities lending, fees)
• Secondary market depth for RWAs

The abovementioned is the minimum bar for cryptocurrency exchange development projects that want institutional and HNW users, not just retail traders, on their platforms. 

Who Must Launch Their Crypto Exchange Software + Tokenization Infrastructure?

The architecture serves a very specific class of operators that include:

• Fintechs and neo-banks are adding regulated trading inside consumer apps
• Brokerages extending into 24/7 tokenized securities
• Crypto exchanges preparing for IPOs or regulatory scrutiny
• Institutions seeking on-chain exposure without custody chaos

Not every crypto exchange software needs to expand into tokenization, as it is meant for those targeting institutional investors. The following class of crypto exchanges must not expand their trading infrastructures to accommodate tokenization engines:

• Meme-driven retail exchanges

• Platforms with shallow compliance depth

As fees race to zero, cryptocurrency exchange software solutions without issuance and custody capabilities will struggle to justify their existence.

Build vs Buy: How Can Crypto Exchanges Build Tokenization Into Their Platforms?

Kraken didn’t build tokenization in-house because doing so takes years, not months.

Issuing regulated tokenized securities means dealing with:

• Multi-jurisdictional approvals
• Custody regulations
• Disclosure standards
• Ongoing audits

Backed already crossed that minefield. Kraken bought time, credibility, and proven volume.

For most founders, the winning move isn’t acquisition. It’s either white label tokenization platforms or modular exchange + tokenization infrastructure that’s already compliance-ready.

What a Tokenization-Ready Exchange Must Have in 2026?

If you’re planning cryptocurrency exchange software development now, these are non-negotiable:

• On-chain issuance controls

• Asset-level compliance logic

• Institutional-grade reporting

• Designed liquidity for tokenized assets

• Jurisdiction-aware access control

Anything less won’t survive regulator review or institutional due diligence.

Exchanges Are Becoming Financial Market Infrastructure

Crypto exchanges are no longer just trading venues; they have evolved into comprehensive financial platforms. They are becoming digital asset superapps that bring together tokenization, prediction markets, crypto payments, and many other functions.

Tokenization connects traditional assets to on-chain liquidity, making it available for global access and programmable settlement. The exchanges that own Fiat/RWA rails will define the next decade of finance.

At Antier, a leading cryptocurrency exchange software development company, we’re building exchange + tokenization platforms designed for this exact shift. Whether it’s a white label crypto exchange, turnkey tokenization engine, or a custom institutional build, we excel at delivering the best. 

The future crypto exchange software is a regulated multi-asset trading infrastructure. So, what are you waiting for? Let’s build one.