London Stock Exchange Plans to Launch Tokenized UK Stocks
The London Stock Exchange Group will collaborate with Kraken's parent company, Payward, to launch tokenized stocks tracking the prices of major UK listed companies at the newly established LSE 24 night trading venue starting in 2027, pending approval from the UK's Financial Conduct Authority.
Payward operates the xStocks platform and plans to offer tokens for the 100 largest UK stocks by market capitalization to qualified investors in over 110 countries in the coming weeks; specific companies, token codes, and exact launch dates have not yet been announced, and UK investors are not included in this early access.
The legal structure of xStocks does not involve direct issuance of native on-chain stocks by the company. Each token is backed 1:1 by traditional stocks held in a custodial structure, giving holders economic exposure to the underlying stocks but lacking full legal ownership, voting rights, or direct dividend rights as common shareholders; Payward's product documentation states that dividend economic benefits will be reinvested.
The LSE announced in July that it will launch LSE 24 in the first half of 2027, operating separately from the main market and designed for near-round-the-clock trading from Monday to Friday; the LSE is also developing a digital settlement institution to provide 24/7 digital asset settlement capabilities for banks, brokers, and other market participants.
The LSE stated that tokenized UK stocks will still undergo the same regulatory market checks as ordinary stocks during night trading, including price range controls to ensure token prices reflect the main market prices. Payward claims that on-chain tokens can be transferred between exchanges and self-custody wallets and can be used with stablecoins and on-chain lending tools.
In terms of market mechanisms, Payward and the LSE are not putting traditional stocks directly "on-chain" but are packaging custodial stocks into synthetic economic exposures that can circulate across wallets. Buyers are overseas crypto users looking to access UK blue-chip stocks with small amounts of capital, fragmented shares, and longer trading hours; sellers and liquidity providers must bear quoting, hedging, and spread risks during the main market's off-hours. Beneficiaries include Payward, Kraken, custodians, stablecoin settlement networks, market makers, and on-chain collateral platforms; traditional brokers, closed trading periods, and single custodial entry points will face order flow and asset control diversions.
Source: Public Information