The London Stock Exchange is teaming up with Kraken’s parent company Payward to push tokenization of UK stocks into the mainstream, a move that could let shares of Britain’s biggest listed companies trade onchain around the clock. The partnership, announced Tuesday, brings the 100 largest London-listed firms onto Payward’s xStocks framework, a platform that has already logged more than $40 billion in trading volume since launch.
Summary
Key takeaways
- London Stock Exchange and Payward will tokenize shares of the 100 largest LSE-listed companies through the xStocks framework, with the first batch expected within weeks.
- Tokenized versions of UK stocks will reach investors in more than 110 countries, but UK-based investors are currently excluded from buying them.
- xStocks have generated over $40 billion in total trading volume, with nearly $20 billion settled directly onchain and more than 200,000 holders.
- The LSE plans to eventually list xStocks on LSE 24, its upcoming 24-hour trading venue, pending regulatory approval.
- Payward and the LSE will also explore issuing native equity tokens directly onchain, carrying the same rights as traditional shares.
London Stock Exchange and Payward Team Up to Tokenize UK Stocks
The deal marks one of the most significant steps yet toward bringing a major national stock exchange’s flagship companies into the tokenized asset space. Rather than a niche crypto experiment, this is London Stock Exchange tokenization aimed squarely at some of the most heavily traded names in the FTSE.
100 Largest LSE Companies Head to the xStocks Framework
Under the agreement, shares of the 100 biggest companies listed on the London Stock Exchange will be made available through Payward xStocks, with the first UK equities expected to go live within the coming weeks. Neither company has given an exact launch date beyond that general window.
Each xStock is backed one-to-one by the underlying security it represents, meaning the tokens are not synthetic derivatives but digital claims tied directly to real shares held in custody.
Global Access, Except for UK Investors
Once live, the tokenized shares will be accessible to eligible investors across more than 110 countries. Notably, UK-based investors themselves will not be among them, at least for now, since xStocks are not currently available to people based in the United Kingdom. That leaves an odd dynamic where shares of Britain’s largest companies become tradable onchain for foreign investors before domestic ones can buy in.
The move follows Payward’s broader push to expand xStocks beyond its original US-equities focus. In July, the company partnered with financial infrastructure provider GTN to extend the framework internationally, starting with Hong Kong-listed shares before eyeing the UK, Europe and South Korea. That arrangement added execution, custody and record-keeping support across more than 90 international markets.
How Big Is the xStocks Market Already?
The numbers behind xStocks show a platform that has scaled rapidly well beyond a pilot project. As of the LSE announcement, xStocks had generated more than $40 billion in cumulative trading volume, with nearly $20 billion of that settled directly onchain and more than 200,000 holders across the platform.
That growth has been steady rather than sudden. When Payward struck its GTN partnership in July, xStocks supported over 500 tokenized assets and had processed more than $37 billion in volume. By mid-August, that figure had climbed past $38 billion, coinciding with Kraken rolling out 7,000 US stocks to eligible customers across the European Economic Area alongside more than 700 xStocks and over 600 crypto assets in the same account, offered through Payward Europe Digital Solutions (CY) Limited, a Cyprus firm authorized under the EU’s MiFID II framework.
Structure Behind Each Token
What makes xStocks distinct from a conventional brokerage holding is flexibility of movement. Because each token is backed one-to-one by the underlying stock, it can trade around the clock through supported centralized exchanges, be moved into self-custody wallets, or interact with compatible onchain applications, none of which is possible with a traditional share sitting in a standard brokerage account bound by exchange hours.
What Comes Next: LSE 24 and Native Onchain Shares
The most consequential part of the announcement may not be the tokenization itself but where these tokens could eventually trade. The London Stock Exchange is positioning xStocks as a potential building block for its planned round-the-clock venue, LSE 24, though that step still depends on approval from regulators.
A Regulated Venue for Round-the-Clock Trading
Subject to regulatory approval, the LSE intends to list xStocks and support their trading on LSE 24, which is expected to eventually cover tokenized equities from the US, European Union, UK and Hong Kong, with room for additional asset classes as the framework matures. The exchange had already been laying groundwork for overnight trading before this deal, having flagged in July a separate overnight market targeted for the first half of 2027 focused on exchange-traded products linked to UK and US markets.
LSE chief executive Julia Hoggett has said retail traders were showing interest in using London’s time zone to gain exposure to both domestic and international assets, a dynamic that the Payward tie-up now folds tokenized securities into. Hoggett struck a measured tone about how far this should go, saying tokenization “must develop in a way that preserves the trust, rights and role of regulated markets.”
Exploring Fully Onchain Equity Issuance
Beyond distributing tokens tied to existing shares, Payward and the LSE said they will explore issuing native equity tokens directly onchain, structured to be fully fungible with traditional shares and carrying the same rights as conventional stock. That would mark a departure from the current xStocks model, where tokens are issued against securities held through Payward’s custody framework rather than created natively on a blockchain by the exchange itself. No timetable has been set for this piece of the plan.
Payward co-CEO Arjun Sethi framed the collaboration as proof that crypto and traditional finance were never destined to clash. “For years, the assumption was that crypto and traditional finance were on a collision course, and one of them would have to lose. That was never the real story,” Sethi said.
Why This Matters for Markets and Investors
The partnership signals a broader shift of blockchain-based tokenized stocks toward regulated financial infrastructure rather than staying confined to crypto-native platforms. Instead of xStocks living purely on exchanges like Kraken, the framework now has a plausible path into a licensed stock exchange venue, which could give institutional investors more comfort engaging with tokenized products.
There’s also a growing appetite for using tokenized shares as more than a trading instrument. In July, Kraken began letting eligible customers outside the United States On Kraken Pro, you can leverage ten assets as collateral to engage in futures and margin trading through selected xStocks. qualified at launch, including tokenized versions of Apple, Nvidia, Tesla, Strategy, Robinhood, Alphabet and several major ETFs. Kraken applied different haircuts depending on the asset, with broad-market products like tokenized SPY and QQQ receiving 10% haircuts, several individual stocks carrying 20% haircuts, and more volatile names facing steeper discounts. Futures collateral was made available to eligible clients outside the US, including those in the EEA, while margin collateral excluded EEA customers.
That kind of use case matters because it lets investors keep exposure to tokenized shares while simultaneously deploying the same holdings to support other positions, without first having to sell. It’s a functionality traditional brokerage shares simply can’t offer in the same way.
Market reaction to the announcement was muted at best. London Stock Exchange Group shares fell roughly 2% in early London trading Tuesday, even as the deal was framed as expanding, not undermining, the exchange’s core business.
FAQ
What is the scope of the London Stock Exchange and Payward partnership?
They will tokenize shares of the 100 largest London Stock Exchange-listed companies using the xStocks framework.
Who can invest in the tokenized shares via xStocks?
Investors in over 110 countries can access xStocks, but UK-based investors are currently excluded.
What future trading infrastructure will support xStocks on the LSE?
The London Stock Exchange plans to support xStocks trading on its upcoming 24-hour venue called LSE 24, awaiting regulatory approval.
Will native equity tokens be issued directly on the blockchain?
Payward and LSE intend to explore issuing native LSE-issued equity tokens with the same rights as traditional shares.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
