The London Stock Exchange is partnering with Payward, the parent of crypto exchange Kraken, to bring blockchain-based versions of the UK’s largest listed stocks to investors.

Payward, which developed the xStocks tokenized-equities framework, and London Stock Exchange Group announced the partnership Tuesday as traditional markets continue expanding their use of blockchain technology.

The companies plan to make shares from the 100 largest companies listed on the LSE available through xStocks over the next few weeks. Each token will be backed one-for-one by the corresponding traditional share, allowing it to trade 24 hours a day on centralized exchanges, self-custody wallets and other onchain platforms.

The move is part of a broader push to tokenize conventional financial assets. Equities, bonds and commodities are increasingly being represented as blockchain tokens, potentially allowing them to move through financial markets with fewer restrictions tied to traditional trading hours and settlement systems.

Conventional shares typically pass through brokers, clearing houses and other intermediaries before a transaction is finalized. Tokenized versions can be transferred around the clock between blockchain wallets or used in decentralized finance applications while remaining linked to the value of the underlying security.

xStocks Gains Momentum

Payward said xStocks has generated more than $40 billion in cumulative trading volume since launching slightly more than a year ago. Nearly $20 billion of that volume has been settled onchain, and the platform now has more than 200,000 holders.

The partnership could extend access to UK-listed stocks across more than 110 countries through blockchain infrastructure. UK residents, however, are not currently eligible to access xStocks.

Subject to regulatory clearance, the LSE plans to eventually list xStocks and support trading through LSE 24, its planned 24-hour trading venue.

The exchange said the initiative could ultimately include tokenized equities from the UK, US, EU and Hong Kong, along with other asset classes as the framework expands.

LSE and Payward are also exploring the possibility of LSE-issued equity tokens. The proposed system would allow LSE members to issue and administer shares directly onchain while preserving the same rights and fungibility attached to conventional stock.

Tokenization Moves Into Mainstream Finance

Payward co-CEO Arjun Sethi said the partnership reflects a growing convergence between crypto and traditional finance rather than a competition in which one industry must replace the other.

LSE CEO Julia Hoggett offered a more cautious view, stressing that tokenization should develop while maintaining the protections, rights and credibility associated with regulated financial markets.

The potential applications extend beyond trading. Financial firms are examining whether tokenized securities can be used as collateral for lending and other financial activities, potentially improving liquidity and enabling new forms of credit creation.

London Stock Exchange Group shares declined about 2% in early London trading after the announcement.