How Luno Brought Tokenized U.S. Equities to South Africa

When Luno launched xStocks on its platform in August 2024, the team wasn't sure how quickly South African investors would take to the concept. Nine months later, nearly 50,000 customers are holding tokenized stocks on Luno.

That's a market that was ready.

The problem xStocks solved

For South African investors, accessing U.S. equities the traditional way meant opening a third-party brokerage account, paying FX conversion fees to move from Rand (South Africa’s currency) into USD, waiting two to three days for trades to settle, and working within exchange control regulations that limit how much each citizen can invest in foreign assets.

Christo de Wit, Country Manager of South Africa at Luno, put it plainly on a recent episode of Tokenized Talks: "For ordinary South Africans to access U.S. markets, there's quite a lot of red tape and challenges involved."

xStocks removed most of it. Customers invest in Rand directly, so the FX conversion doesn't apply and the discretionary allowance isn't consumed. Trades settle instantly. And because xStocks trade 24/5, South African investors aren't bound by U.S. market hours or the time difference that made active trading impractical before.

What users are actually doing

Customer behavior falls into a few patterns. Long-term holders are using tokenized stocks to diversify beyond crypto. Active traders are positioning around macro events. And a meaningful group of new customers (people familiar with equities but new to crypto) are using xStocks as their first onchain investment.

The initial surge centered on tokenized versions of Nvidia (NVDAx) and Tesla (TSLAx). More recently, gold (GLDx) has seen significant uptake, a direct reflection of the macro environment and appetite for defensive assets.

The Blue Chip+ Bundle

One of Luno's more interesting product moves was launching a bundled offering: 30% crypto (20% Bitcoin, 10% Ethereum) and 70% tokenized stocks, allocated 10% per asset, rebalanced quarterly. Rather than asking customers to make allocation decisions across two unfamiliar asset classes, it gave them a single product to buy into.

It's also pulling in a new type of customer. Equity-native investors who had no prior crypto exposure are coming onto the platform through the bundle, using it as a first step onchain.

The education layer

de Wit was candid that "tokenized" still carries unfamiliarity for many investors. Luno's approach is to lead with trust: as one of the oldest crypto exchanges globally and the first to let South Africans buy Bitcoin with Rand, the brand has built credibility that makes customers more open to new products.

The longer-term view is that the word stops mattering. "I think eventually everything is just going to be tokenized," de Wit said. "Maybe the term just completely disappears."

What it means

The Luno case shows what tokenized equities can do in a market with structural barriers. It didn't require a new behavior. It required removing friction from an existing one. South African investors already wanted U.S. equity exposure. xStocks made it accessible in a format they understood.

The same dynamic exists across Southeast Asia, Latin America, and Africa. The infrastructure is ready. The only variable is whether platforms move to meet it.

xStocks are issued by Backed Assets (JE) Limited (a Jersey private limited company) and offered to eligible Kraken customers via Payward Digital Solutions Ltd. (“PDSL”), a company licensed to conduct digital asset business by the Bermuda Monetary Authority. In the European Union / European Economic Area, xStocks are offered to eligible customers via Payward Europe Digital Solutions (CY) Ltd. (“PEDLS-CY”), a Cyprus investment firm authorized and regulated under EU MiFID II. xStocks are not registered under the U.S. Securities Act and are not available in the United States or to U.S. persons. xStocks are also not currently available in the United Kingdom or in any other jurisdiction where their offer or distribution would be unlawful or would require regulatory authorization that has not been obtained. Neither PDSL, Payward Europe Digital Solutions (CY) Ltd. (“PEDLS-CY”), nor their respective affiliates provide investment advice or recommendations, PDSL (Kraken) does not provide investment advice and/or recommendations, and no communication, through any Kraken App or website or otherwise, should be construed as such. Individual investors should make their own decisions or seek professional independent advice if they are unsure as to the suitability / appropriateness of any investment for their circumstances or needs, including potential tax treatment. Investing in xStocks involves an element of risk. The value of an investment may go down as well as up, and past performance is not a reliable indicator of future results. Geo restrictions apply. Read Kraken’s xStocks Risk Disclosure at kraken.com/legal/xstocks as well as the Base Prospectus and related Final Terms for xStocks at https://assets.backed.fi/legal-documentation to learn more.