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The London Stock Exchange is working with the owner of crypto venue Kraken to launch tokenised stocks on its new night-time trading venue, as it pushes further into digital markets.
The LSE is partnering with Payward to give traders access from next year to tokens that will track the share prices of some of the UK’s biggest equities. The tokens will be listed on the recently-announced venue, which will operate from Mondays to Fridays.
It marks the latest push by the LSE into digital assets and comes as traditional exchanges, banks and asset managers are increasingly developing tokenised products in the belief that financial markets are evolving to trade 24/7 on blockchains.
Tokenised equities are blockchain-friendly representations of company shares that can be traded 24 hours a day, seven days a week, between different exchanges and digital wallets and alongside digital assets such as stablecoins. Payward runs xStocks, a platform for tokenised equities traded on Kraken and other venues including OKX and Bybit, and in the next few weeks will make tokenised versions of the UK’s 100 biggest stocks available on its platform.
Each token is backed 1:1 by a conventional share but, unlike a shareholder, the token holder has only limited voting rights and no legal ownership in the company or right to dividend payments.
“We know there are folks in many countries around the world who want access to LSE assets with as little as a dollar or five dollars or ten dollars,” Mark Greenberg, chief commercial officer at Payward, told the FT. “They want to be able to use them in on-chain lending wallets . . . [and] very easily move them” between crypto exchanges and wallets.
In July, the LSE said it would launch a new night-time trading venue operating five days a week in the first half of 2027 that would operate separately from the main market. It is also building a digital settlement house to enable banks, brokers and other market players to settle digital assets 24 hours a day, seven days a week.
Simon McQuoid‑Mason, who leads new product development, market structure and business development at the LSE, said the partnership would “support the future growth of public markets” and was part of the exchange’s broader strategy in developing regulated digital markets.
He said a tokenised equity “provides a synthetic exposure to the underlying [stock] . . . it still tracks the underlying security without being the underlying security”, and that the company was exploring how a “full rights-bearing token” could be developed. He said the LSE had spoken to the CBI, the UK business group, and some companies about this.
Other exchanges such as the Nasdaq in New York are also exploring how to create and encourage companies to issue so-called native equity tokens, which would give token holders the same rights and ownership as shareholders.
Night-time trading in tokenised stocks on the LSE will be subject to “the same regulated market checks” that govern its ordinary stock prices in order to ensure that “stocks can trade within a fair band” and that prices reflect those on the main market, McQuoid‑Mason said.
The LSE listing of tokenised UK stocks depends on approval from the Financial Conduct Authority and trading is expected to start in 2027.
The UK government and financial regulators are seeking to develop digital asset markets and the use of blockchains in financial services. Last week, the Bank of England was given a new secondary objective to boost innovation in payments and digital money, in a strong signal that the UK wants to position itself as a competitive hub for digital assets.