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Payward, the parent of crypto exchange Kraken, is partnering with the London Stock Exchange to bring UK equities onchain. In the coming weeks Payward will issue the 100 largest London listed companies as xStocks, its tokenized equity framework. Subject to regulatory approval, the LSE then plans to list xStocks for trading on LSE 24, the 24/5 venue it announced in July. The two firms will also explore native LSE issued equity tokens.
xStocks are loan notes rather than shares. Backed Assets (JE) Limited, a Jersey company, holds the underlying stock as collateral and issues tracker certificates that replicate the share price 1:1. Holders have a claim against the issuer rather than shareholder rights, and redemptions settle in cash or crypto rather than delivery of shares. The framework has passed $40 billion in cumulative volume across more than 200,000 holders in just over a year.
Tokenizing London’s biggest names potentially extends their reach to investors in more than 110 countries rather than changing anything for domestic holders who don’t currently have access. Payward pitches this to issuers as a new global channel for their shares.
The stocks that xStocks represent are also increasingly global, with Payward noting that xStocks will track US, EU, UK, Hong Kong, alongside additional asset classes. In July Payward partnered with Dubai’s GTN to tokenize international stocks, starting with those in Hong Kong. It also has a tie up with Deutsche Börse’s Clearstream. So LSE becomes an overnight trading venue for tokenized exposure to stocks listed on NYSE, Nasdaq, Deutsche Börse and HKEX, none of whom are party to the venue.
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Source: www.ledgerinsights.com