The London Stock Exchange is teaming up with Payward, Kraken’s parent company and the developer of the xStocks tokenization platform, to bring major UK-listed equities onto blockchain networks.
The partnership is the latest example of traditional finance accelerating its move toward tokenized assets.
London Stock Exchange Group and Payward said Tuesday that investors will soon be able to access blockchain-based versions of shares from some of the UK’s biggest listed companies.
Over the next several weeks, the 100 largest companies listed on the LSE are expected to be added to xStocks. The platform represents each share with a token backed on a one-to-one basis by the underlying stock. These tokens can trade continuously on centralized exchanges, be held in self-custody wallets and interact with onchain applications.
The initiative builds on a wider financial-industry trend toward putting traditional assets such as equities, bonds and commodities onto blockchains.
Conventional shares held through brokerage accounts generally follow market-hour settlement processes and pass through several intermediaries, meaning transactions can take days to finalize. Tokenized shares can be transferred around the clock and moved directly between wallets or into decentralized applications while maintaining exposure to the underlying stock.
xStocks Already Has Significant Activity
Payward said xStocks has recorded more than $40 billion in cumulative trading volume since its launch slightly more than a year ago. Almost half of that activity, nearly $20 billion, has been settled onchain.
The platform now has more than 200,000 holders, according to the company.
The LSE-Payward partnership could also expand the international reach of UK equities. Tokenized versions of the shares will be accessible through blockchain infrastructure to investors across more than 110 countries.
UK-based investors are currently excluded from the xStocks platform.
Subject to regulatory approval, the LSE plans to eventually list xStocks and support their trading through LSE 24, its proposed 24-hour trading venue. The platform is expected to eventually accommodate tokenized equities from the US, EU, UK and Hong Kong, along with other asset classes.
The companies will also explore a separate model in which the LSE itself issues equity tokens. LSE members could potentially create and manage shares directly on blockchain networks while preserving the same rights and fungibility associated with conventional shares.
LSE Sees Tokenization as an Evolution
Payward co-CEO Arjun Sethi said the partnership reflects a shift away from the idea that crypto and traditional finance must compete directly with one another.
LSE CEO Julia Hoggett struck a more cautious tone, saying tokenization should develop in a manner that maintains confidence in regulated markets while protecting investor rights and established market roles.
The industry is increasingly exploring additional uses for tokenized securities, including their use as collateral. If these assets can be integrated into lending markets, they could potentially improve liquidity and support new forms of credit creation, similar to the role traditional government bonds play in financial markets.
London Stock Exchange Group shares fell about 2% in early London trading after the announcement.
