Tokenized stocks may be coming to the London Stock Exchange, as Payward, the parent company of Kraken, has announced plans to tokenize the top 100 London-listed equities under its xStocks brand. The offering will bolster the stock exchange’s decision to explore LSE 24, its planned 24-hour trading venue.
If regulators approve the arrangement, it could allow LSE members to trade tokenized securities representing companies from several countries, including the U.S. and members of the European Union, as well as around the clock.
Benefits for Investors
The tokenized shares will be available to investors across more than 110 countries, though ironically, xStocks remain unavailable to UK investors. XStocks have accumulated more than $40 billion in total volume since launching just over a year ago.
“Investors could gain around-the-clock access, move holdings between exchanges, wallets, and on-chain applications, and benefit from faster settlement with less time being tied up between trades waiting for it to settle,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Look at what’s happening to assets like crude oil futures on Hyperliquid, opening up weekend liquidity, giving another trading day and real-time insight as to what oil price action is doing when it normally doesn’t trade. Volume has increased significantly over the weekend—that’s demand from the market.
“The LSE could combine those benefits with regulated infrastructure, shareholder protections, reliable pricing, and even voting rights,” he added, “but all of these will depend on whether deep liquidity develops across these markets.”
Drawbacks to Overcome
The LSE plans to introduce overnight trading in the first half of 2027 to attract international retail investors and compete with crypto markets that never close. The overnight platform will initially target exchange-traded products.
There are concerns regulators will need to consider, though, before giving approval to the scheme. Many investors in tokenized stocks may not understand that they aren’t directly buying a share in a company. Instead, tokenized stocks are held by a special-purpose company and backed by the shares they represent.
Last year, the World Federation of Exchanges (WFE) addressed a letter to the leading global securities commissions to warn about the risks of tokenized stocks, saying that these representations of stocks were often listed by unregulated brokers and crypto firms. But the WFE was primarily warning about tokenized stocks traded outside of regulated markets, a problem that regulated trades on the LSE could solve.
