Backpack Launches Securities Platform Combining Traditional, Tokenized Stocks

Crypto exchange Backpack has launched a securities platform that combines traditional stock trading with tokenized equities. The move is aimed at pairing regulated share ownership with blockchain-based transferability.

The Block reported on June 2 that Backpack rolled out Backpack Securities, which brings together trading in conventional stocks and tokenized shares.

Backpack Securities has two main features. First, it allows users to buy, hold and sell actual US stocks through regulated US brokerage and custody infrastructure. Users will have shareholder rights similar to those offered by traditional brokerages, including cash dividends, corporate actions and links to clearing and settlement infrastructure.

The second feature is stock tokenization. Backpack plans to work with Sunrise, a Solana-based tokenization protocol, to allow users to convert their holdings into on-chain securities.

The tokenized shares will initially be transferable on the Solana network. Backpack plans to make the tokens compatible with wallets and decentralized finance, or DeFi, protocols, while enabling 24-hour trading. It also plans to expand to other blockchains over time.

Backpack Chief Executive Officer Armani Ferrante said real stock ownership and blockchain-native access are not competing models, but two parts of the same financial system. He added that Backpack has spent the past three years building the foundation for that model.

The launch comes as crypto exchanges expand into stocks, derivatives, payments, prediction markets and tokenized assets. Major exchanges including Coinbase, Kraken, Binance and OKX are also stepping up strategies that combine traditional financial products with crypto services.

Robinhood also recently introduced a service on Arbitrum that tokenizes US stocks and exchange-traded funds. Tokenized equities can offer more flexibility than traditional stock trading, including extended trading hours, fractional ownership and DeFi integration.

Backpack began in late 2023 as a Solana wallet project launched by the team behind the Mad Lads nonfungible token, or NFT, project. Its co-founders include Ferrante, a former Solana developer and early Alameda Research employee, and former FTX general counsel Can Sun.

Backpack Securities' brokerage service will be rolled out in phases starting this month. Backpack had previously reviewed a plan to allocate 37.5% of its total exchange-token supply of 1 billion tokens to the company's treasury and introduce an equity-linked staking model.