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FinanceLondon Stock Exchange to tokenize FTSE 100 stocks onchain with Kraken parent Payward
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The London Stock Exchange (LSE) will put its 100 biggest stocks, the FTSE 100, onchain as xStocks, tokens backed 1:1 by real shares that trade 24/7 on exchanges and in self-custody wallets across 110+ countries. The product is created by Kraken's parent company Payward and issued by Backed Assets (JE) Limited, a Jersey company, offered to Kraken clients via Payward Digital Solutions Ltd, licensed in Bermuda. Notably, UK residents cannot yet buy these tokens as they are classified as offshore unregulated instruments by the FCA. xStocks has already processed $40bn in volume over just over a year with nearly $20bn settled onchain to over 200,000 holders. The LSE plans to list them on LSE 24, its new 24-hour venue, and will explore shares issued natively onchain with the same rights as traditional stock. This contrasts with the US approach where the SEC cleared DTCC to tokenize assets but keeps tokens inside a vault, while the LSE version puts the token in the user's wallet. The move represents a bid by London to compete with New York for listings by innovating on market plumbing.
Source report
The London Stock Exchange (LSE) will put its 100 biggest stocks onchain in partnership with Payward, the parent company of cryptocurrency exchange Kraken.
FTSE 100 Becomes xStocks
In the coming weeks, the FTSE 100 will be converted into xStocks — tokens backed 1:1 by real shares. These tokens will trade 24/7 on exchanges, in self-custody wallets, and across onchain applications in over 110 countries.
However, the UK is excluded. British residents cannot yet purchase these tokens. This is because:
- xStocks are issued by Backed Assets (JE) Limited, a Jersey company
- They are offered to Kraken clients via Payward Digital Solutions Ltd, which is licensed in Bermuda
- As far as the UK's Financial Conduct Authority (FCA) is concerned, they are not stocks but offshore unregulated instruments
Product Performance
xStocks, created by Kraken parent Payward, converts regular stocks into tokens for onchain trading. Key metrics include:
- $40 billion in trading volume over just over a year
- Nearly $20 billion settled onchain
- Over 200,000+ holders
Future Prospects for the UK
The UK could gain access to proper stock tokens soon. The LSE plans to list them on LSE 24, its new 24-hour trading venue. LSE and Kraken will explore shares issued natively onchain, with the same rights as traditional stock.
Regulatory Context
Tokenized stocks are arriving globally, but with important nuances:
US Approach (SEC)
In December, the SEC cleared the DTCC (Depository Trust & Clearing Corporation) to tokenize assets it already custodies — but with strict controls:
- Approved wallets only
- Sanctions screening required
- DTC retains power to mint, burn, or forcibly move any token
- Tokens remain inside the vault
LSE Approach
The LSE version places the token directly in the user's wallet. Native issuance raises the question of whether the blockchain itself can serve as the official register — representing a fundamentally different market structure.
Strategic Implications
London has spent a decade losing listings to New York. Competing on market plumbing and infrastructure may be a fight the city can actually win.
Source
sytaylorNeutral / independent
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London Stock Exchange partners with Kraken parent to tokenize FTSE 100 stocks on blockchain