London Stock Exchange Partners With Payward to Explore Tokenised UK Equity Markets

London Stock Exchange Group (LSEG) announced plans on September 1 to launch UK tokenised equity structures and formed a partnership with Payward, the parent company of Kraken and developer of the xStocks tokenised equities framework, to explore how regulated market infrastructure and digital-native distribution can support tokenised public equity markets.

Subject to regulatory approval, the London Stock Exchange intends to list xStocks and begin trading them on LSE 24, its 24-hour trading venue, in 2027. In the coming weeks, the 100 largest companies listed on the London Stock Exchange will become available as xStocks, tokenised representations of publicly traded shares backed 1:1 by the underlying security.

The partnership sits alongside a separate initiative: the London Stock Exchange is assessing its own UK tokenised equity structure, designed to broaden access to capital markets while preserving the shareholder rights, protections and governance standards that underpin public markets today. That work will consider how LSEG's Digital Securities Depository, infrastructure built to support the issuance, recording, transfer and settlement of digital securities within a regulated model, could handle settlement and asset servicing for tokenised shares, again subject to regulatory approval. The initiative extends LSEG's broader push to modernise market infrastructure through LSE 24, the Digital Securities Depository and Digital Settlement House, a platform enabling programmatic settlement between payment networks on and off-chain.

Julia Hoggett, chief executive of LSE plc and head of digital and securities markets at LSEG, framed the partnership as an attempt to expand how investors access markets without abandoning the standards that underpin them, saying tokenisation must develop in a way that preserves the trust, rights and role of regulated markets.

Arjun Sethi, co-chief executive of Payward, said the assumption that crypto and traditional finance were on a collision course was never the real story, arguing the opportunity lies in running both on the same rails, with tokenisation changing not just who can reach a market but how shares are issued, traded, settled and moved once they do.

The deal extends a run of institutional tie-ups for xStocks over the past year. The framework launched with tokenised US stocks and ETFs and has since grown to more than 500 tokenised assets spanning equities, ETFs and IPOs, with more than $37 billion in cumulative transaction volume and close to 200,000 holders worldwide, according to Payward. In March, Payward partnered with Nasdaq to build a gateway connecting permissioned and permissionless tokenised equity markets, with Payward serving as settlement layer and handling KYC and AML compliance. In July, it partnered with fintech infrastructure provider GTN to expand xStocks beyond US markets, beginning with Hong Kong-listed equities ahead of planned expansions into UK, European and South Korean assets. The London Stock Exchange partnership is the first to pair Payward's tokenisation framework directly with a major exchange's own regulated settlement infrastructure, rather than layering it on top of existing market access alone.