The London Stock Exchange Group (LSEG) is preparing to introduce "tokenised" UK shares as part of its effort to broaden global access to London-listed equities and integrate blockchain technology into its operations. In partnership with Payward, the owner of the Kraken cryptocurrency exchange, LSEG plans to launch xStocks—blockchain-based digital representations of publicly traded shares—on its upcoming 24-hour trading platform, LSE 24, expected to debut in 2027 pending regulatory approval.
Tokenisation involves creating a digital, blockchain-backed equivalent of an asset, allowing shares to be traded and settled digitally without relying on a centralized repository. Proponents argue this could transform stock markets by enabling continuous trading beyond conventional hours, instant settlement, enhanced liquidity, and lower transaction costs. LSEG emphasizes that tokenised shares will uphold existing shareholder rights, protections, and market governance standards.
This move follows LSEG’s February announcement of its plans to develop a blockchain-based settlement system. Other market participants exploring tokenisation include Robinhood, which has introduced tokenised stocks in the European Union, and Coinbase, which is expanding its presence in the sector.
Julia Hoggett, chief executive of LSEG, highlighted the transformative potential of tokenisation but stressed the need for its development to maintain confidence in regulated markets. "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," she said.
The broader financial industry has expressed optimism about tokenisation’s potential to reshape asset trading and ownership. A recent report by professional services firm PwC forecast that tokenised assets could become the standard method for trading securities and other assets, citing benefits such as programmable release conditions for funds, faster transaction speeds, and improved market efficiency across debt, equity, and commodity sectors. BlackRock CEO Larry Fink has also noted that tokenisation could make equity investment more accessible to a wider range of investors.
However, concerns regarding risks and market integrity remain. The World Federation of Exchanges called last year for stronger regulatory oversight of tokenised stocks, warning that the new instruments could create novel risks for investors and undermine the stability of financial markets.
Arjun Sethi, co-chief executive of Payward, pointed to the fundamental changes tokenisation could bring, noting that it not only broadens market participation but also alters how shares are issued, traded, settled, and transferred.
As LSEG and its partners advance their plans, the development will be closely monitored by regulators, market participants, and investors seeking clarity on the implications of integrating blockchain technologies into mainstream equity markets.