Cake Wallet, a mobile cryptocurrency app with a strong privacy focus, has recently announced the integration of xStocks to its supported tokens, to be released on the next update. The xStocks technology allows users throughout the world to get exposure to world-class equities like Google, Amazon, and Nvidia, in a familiar crypto format, minimizing the low privacy and high-friction user experience common to traditional finance.
“With Cake Wallet, anyone can be their own bank and their own brokerage, saving and investing from the same decentralized ecosystem,” said Vikrant Sharma, CEO of Cake Labs. Alex J., Chief Product Officer (CPO) at LetsExchange, also commented on the announcement in a press release shared with Bitcoin Magazine, saying, “It is great to see xStocks trading available in Cake Wallet, one of the most trusted wallets in the crypto space.”
xStocks will be available to Cake Wallet users directly on the app, presumably with little, if any, personal information required for users to be able to trade the assets. While details of the implementation on Cake were not shared, Cake Wallet’s privacy-first design implies a similar user experience. Wallets like Phantom have also recently launched similar access to tokenized equities, without requiring any information from users beyond control over their private keys — familiar to many users as 12 words they should store securely.
This rising interface to world-class finance demonstrates the growing difference between generations, as younger, more tech-adept users grow tired of the controls and restrictions of traditional finance, willing to take the risks of custody into their own hands.
Crypto, for all its faults, has led to the widest distribution of cryptographic material to the public in the history of cryptography. Hundreds of millions of people throughout the world likely have crypto wallets of one kind or another on their mobile phones, and that gives them access to cryptography so powerful that the U.S. government once considered it a weapon. As a result, millions of people can get access to financial tools previously only available to the wealthiest citizens of the First World.
This cryptography protects user data from hackers by simply never exposing it to third-party financial services. The inability of corporations to secure user data continues to be demonstrated hack after hack, as seen recently with Discord, which had 70 million identity records of its users compromised. Hacks of this sort may be related to the rising costs of identity theft in the United States, as those records are used to defraud users of traditional finance.
Ironically, the same regulations that make traditional finance incapable of scaling out to the developing world — because of the high compliance burdens they must meet — also keep Americans from accessing financial tools like xStocks. The press release explained that the new feature on Cake Wallet was restricted to a very curious list of countries; “xStocks will be accessible in nearly every country worldwide. Due to regulatory restrictions, the service will not be available in the United States, Australia, Canada, Belgium, the UK, Afghanistan, Belarus, Cuba, Iran, and North Korea.” An odd thing for those countries to have in common.
Cake Wallet will likely have to implement some kind of geo-location filter, likely based on the internet IP addresses the users log in through, though the press release did not share details on this matter.
xStocks tokenized equities are issued by Backed.fi, a Swiss-based financial firm that has been in the market since 2021. Backed.fi is the primary counterparty xStocks users need to trust, serving as a kind of broker between the companies that issue these equities and the users buying up xStocks. It’s also unlikely that users will get any kind of voting rights, nor is it clear how dividend payouts in some equities might work. Nevertheless, this may be the first time many native crypto users have easy access to the best equities in the world, which will be a stark contrast to the memecoins and highly speculative crypto assets otherwise available to this user base. Such competition is probably a very good thing.
Source: https://bitcoinmagazine.com/business/cake-labs-launches-xstocks-in-cake-wallet-enabling-worldwide-crypto-users-to-trade-top-equities
