The London Stock Exchange has partnered with Payward, the parent company of Kraken, to explore tokenised equities through regulated market infrastructure.
The partnership will examine how digital native access and blockchain based systems can connect with LSEG’s regulated market ecosystem, while maintaining requirements around anti money laundering and operational resilience.
LSEG Builds Regulated Infrastructure for Tokenised Equities
LSEG is assessing a UK tokenised equity structure designed to broaden access to capital markets while preserving the shareholder rights, protections and governance standards that underpin public markets.
The work will also consider how LSEG’s Digital Securities Depository can support the settlement and asset servicing of tokenised securities, subject to regulatory approval.
The partnership puts Tokenised Equity Infrastructure directly within LSEG’s wider work to modernise market infrastructure and support the digitalisation of capital markets.
LSEG said the proposed structure is intended to support issuers seeking new routes to market and give investors additional ways to access public equities. The exchange is also examining how assets can move across increasingly digital financial markets without creating isolated pools of liquidity.
Payward Partnership Connects On Chain and Regulated Markets
The partnership with Payward will focus on digital native access, wallet based interaction and partner infrastructure that could connect on chain networks with LSEG’s regulated market environment.
The companies will explore opportunities to connect regulated capital markets with private and public blockchains while continuing to meet relevant regulatory obligations.
The work also includes plans to examine how Tokenised Equity Infrastructure can support the interaction between traditional financial systems and digital asset networks.
Separately, and subject to regulatory approval, LSE intends to list xStocks and begin trading them on LSE 24 in 2027. LSEG describes xStocks as 1:1 backed tokenised representations of publicly traded shares.
The planned activity is a future element of the wider partnership, while the current development centres on LSEG’s exploration of regulated infrastructure for tokenised equities and its work with Payward.
LSE CEO Julia Hoggett said tokenisation has the potential to change how investors access financial markets, but stressed that it needs to develop while preserving the trust, rights and role of regulated markets.
Payward Co CEO Arjun Sethi said the partnership would explore how blockchain based access could operate alongside established market infrastructure.
The partnership gives LSEG and Payward a framework to examine how Tokenised Equity Infrastructure can connect digital access with regulated capital markets while preserving existing market standards.