LSEG Partners with Payward to Launch Tokenised UK Shares and Expand Trading Access
London Stock Exchange Group Embraces Tokenisation and Blockchain Technology
Overview of the Partnership and Tokenised Shares Initiative
LONDON, Sept 1 (Reuters) - London Stock Exchange Group plans to launch tokenised UK shares to expand global access to London-listed shares, it said on Tuesday, and will partner with Payward, parent of crypto exchange Kraken, to explore new ways to trade on equity markets.
Background: LSEG’s Push into Crypto Assets
The move marks the latest push by the London Stock Exchange to embrace crypto assets, after announcing in February that it would build a blockchain-based settlement service.
Benefits and Features of Tokenised UK Shares
LSEG said the new plans would enable UK-listed companies to be represented as blockchain-based tokens and trade round the clock, while maintaining the shareholder rights, protections and governance standards that underpin public markets.
Industry Context and Competitive Landscape
Other Market Players Entering Tokenised Stocks
Broker Robinhood has launched tokenised stocks in the EU while crypto exchange Coinbase is also making a push into the nascent sector.
LSEG’s Upcoming LSE 24 Trading Venue
LSEG recently announced plans to launch LSE 24, a round-the-clock trading venue, in the first half of next year.
Future Plans: Listing xStocks on LSE 24
As part of the collaboration with Payward, London Stock Exchange said it intends to list xStocks, tokenised representations of publicly traded shares, on LSE 24 in 2027, subject to regulatory approval.
Potential Impact and Regulatory Considerations
Advantages of Tokenisation in Stock Markets
Proponents of tokenisation say it could revolutionise stock markets by allowing shares to be traded 24/7 and settled instantly, boosting liquidity and reducing transaction costs.
Regulatory Concerns and Market Integrity
But the World Federation of Exchanges last year called on securities regulators to clamp down on tokenised stocks, saying that they create new risks for investors and could harm market integrity.
LSEG’s Commitment to Market Trust and Regulation
"Tokenisation has the potential to change how investors access, and how issuers use, financial markets, but it must develop in a way that preserves the trust, rights and role of regulated markets," said Julia Hoggett, CEO of London Stock Exchange and head of digital and securities markets at LSEG.
(Reporting by Yadarisa Shabong in Bengaluru and Samuel Indyk in London; Editing by Rashmi Aich and Susan Fenton)
