London Stock Exchange and Payward, the parent company of Kraken, is to bring tokenised UK equities to market.
It comes as increasing numbers of exchanges, banks and asset managers accelerate efforts to move traditional financial assets onto blockchain-based infrastructure.
Julia Hoggett, chief executive of LSE plc and head of digital and securities markets at LSEG, said the partnership could widen investor access while preserving the protections of regulated markets.
“Tokenisation has the potential to change how investors access, and how issuers use, financial markets, but it must develop in a way that preserves the trust, rights and role of regulated markets,” she said.
Under the agreement, Payward will tokenise the 100 largest London-listed companies through its xStocks framework, creating blockchain-based representations of listed equities backed on a 1:1 basis by the underlying shares.
The companies said investors in more than 110 countries will be able to access the assets as programmable, 24/7 tradable instruments.
Subject to regulatory approval, the London Stock Exchange plans to support trading of xStocks on LSE 24, its forthcoming extended-hours trading venue.
The firms will also explore the development of issuer-sponsored equity tokens that could eventually carry the same rights as conventional shares.
Arjun Sethi, co-chief executive of Payward, said the initiative demonstrated how blockchain technology and traditional market infrastructure could work together.
“Doing this with an institution the calibre of the London Stock Exchange is what turns that vision from an idea into lasting market infrastructure,” he said.
The announcement forms part of LSEG’s broader digital markets strategy, which includes plans for a Digital Securities Depository and a Digital Settlement House designed to support the issuance, servicing and settlement of digital assets.
Interest in tokenised securities has grown rapidly across global capital markets.
Nasdaq has explored tokenised equity models, while firms including Robinhood and Coinbase have expanded their focus on tokenised shares as exchanges seek to offer investors round-the-clock access to financial markets.
Payward said xStocks has generated more than $40bn in trading volume and surpassed 200,000 holders since launch, highlighting growing demand for blockchain-based access to listed securities.
