LSEG to Launch Tokenized UK Stocks via Payward in 2027

London Stock Exchange Group (LSEG) has agreed to partner with Payward, the parent company of crypto exchange Kraken, to issue tokenized shares of the 100 largest companies listed on the London Stock Exchange. The new instruments, designated as xStocks, are scheduled to launch in 2027 on LSEG's 24-hour trading venue, LSE 24, subject to regulatory approval.

In an announcement released on September 1, LSEG detailed the collaboration as part of a broader expansion into the crypto sector. The partnership follows LSEG's prior initiatives, including plans for a blockchain-based settlement service and extended trading hours. Under the terms of the agreement, Payward will provide the tokenization framework for these equity structures. The two firms intend to explore wallet-based access, blockchain infrastructure, and connectivity with LSEG's regulated market ecosystem.

Julia Hoggett, CEO of London Stock Exchange, emphasized that the development of tokenization needs to maintain the integrity of regulated markets while protecting investor rights. Payward co-CEO Arjun Sethi characterized the alliance as a demonstration that the crypto and traditional finance sectors can collaborate effectively instead of competing against one another.

The move aligns with recent industry developments where digital asset platforms have begun offering traditional securities. Kraken recently launched US stock trading in the European Economic Area. In the UK, Coinbase has introduced 24/5 US stock trading for all users, while Robinhood began rolling out crypto, stocks, ISAs, and derivatives trading to eligible UK customers through Bitstamp.

LSEG aims to recapture retail investors who have shifted their capital to crypto platforms to avoid the limited trading hours of traditional domestic brokers. According to reports, many British retail investors have already moved their funds to top UK crypto trading platforms to bypass these restrictions. Stock exchanges currently face competition from crypto firms offering real-time settlement and continuous access.

The launch of xStocks remains contingent on regulatory clearance. LSEG plans to introduce extended trading hours in early 2027 as part of its strategy to compete with the 24/7 offerings from digital asset firms.