The London Stock Exchange (LSE) is preparing to launch tokenised equity structures through a new partnership with the parent company of crypto exchange Kraken, the latest in a series of moves to modernise.

The LSE will work with Payward, which owns Kraken and is described as a unified financial infrastructure platform, to explore how it can create tokenised equity markets. The exchange said that this structure will be designed to broaden access to capital markets whilst preserving existing shareholder rights, protections and governance standards.

The two companies will collaborate on how best to connect the LSE’s regulated market ecosystem with digital-native technologies and wallet-based interactions, the exchange said.

This is the LSE’s latest push into the digital space, following programmes including LSE 24, an all-day trading venue offering that the exchange described at launch as “near-continuous trading from Monday to Friday”.

From next year, the Payward partnership will also offer retail investors the ability to trade tokens that track the share prices of public companies on the LSE 24. The LSE said that they will be directly linked to the value of public shares and move when they move, while adding the “speed, programmability, and around-the-clock access of blockchain”.

Julia Hoggett, chief executive of LSE and head of digital and securities markets at the LSE group, said: “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.

“By working with Payward, and continuing to collaborate across the market infrastructure ecosystem, we are exploring how issuers and investors can benefit from new forms of access while maintaining the standards that underpin public markets.”

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