LSE Taps Payward to Tokenize Leading UK Stocks

The London Stock Exchange is joining forces with Payward, the parent company of Kraken, to put some of Britain’s biggest listed companies on blockchain-based rails.

The partnership announced Tuesday will use Payward’s xStocks framework to create tokenized versions of major UK-listed shares. The initiative marks another step in the growing adoption of blockchain technology by traditional financial markets.

Over the next several weeks, the 100 largest companies listed on the London Stock Exchange are expected to be added to xStocks. Each token will correspond to one underlying share and be backed on a one-for-one basis.

Unlike conventional equities, which trade and settle within established market schedules, xStocks can operate around the clock. The tokens can be traded through centralized exchanges, stored in self-custody wallets and used across onchain applications.

Tokenized UK Stocks Head to Blockchain

The project is part of a broader financial-industry push to move real-world assets onto blockchain networks. Market participants have been developing tokenized versions of stocks, bonds, commodities and other traditional instruments in an effort to make them more transferable and accessible.

Traditional stock transactions typically involve brokers, clearing systems and other intermediaries, with settlement taking place through established market infrastructure. Tokenized securities can move between blockchain addresses at any time and potentially be integrated into decentralized finance applications.

Payward said xStocks has processed more than $40 billion in trading volume since launching just over a year ago. Almost $20 billion of that volume was settled directly onchain, while the platform has accumulated more than 200,000 holders.

The agreement could give investors in more than 110 countries access to blockchain-based versions of UK-listed stocks. The tokens are not currently available to investors based in the UK.

Subject to regulatory approval, the LSE plans to list xStocks and support their trading through LSE 24, its proposed 24-hour trading venue.

The exchange expects the platform to eventually support tokenized shares from the UK, US, EU and Hong Kong, as well as other asset classes.

LSE and Payward are also considering a system for issuing equity tokens directly through the exchange. The proposed setup would allow LSE members to issue and service shares onchain while retaining the same rights and fungibility as traditional securities.

Regulated Markets Meet Crypto Infrastructure

Payward co-CEO Arjun Sethi said the partnership demonstrates that crypto and traditional finance can develop alongside each other rather than competing for dominance.

LSE CEO Julia Hoggett stressed that the transition needs to preserve investor protections and the established role of regulated markets.

The industry is also examining how tokenized assets could be used beyond simple trading. If tokenized securities can serve as collateral, they could potentially be incorporated into lending markets, unlock additional liquidity and support new forms of credit creation.

London Stock Exchange Group shares fell around 2% in early London trading following the announcement.