LSE Explores Blockchain Shares Amid Growing Interest in Tokenized Stocks

The London Stock Exchange (LSE) is exploring ways to bring shares onto blockchain networks while preserving shareholder rights. This move aims to provide cheaper trading and wider access to investments.

Tokenized stocks, which mimic traditional shares but are not actually stocks, have been gaining popularity. These tokens can be bought and sold like stocks, but they do not grant the same ownership rights as actual shares.

The LSE's announcement with Payward describes a structure still under assessment and subject to regulatory approval. Separately, it plans to list xStocks on its LSE 24 venue in 2027, also subject to approval.

Kraken, the company behind xStocks, makes it clear that token holders do not receive underlying shareholder voting rights. The economic benefit of dividends is reflected through an adjustment to their effective holdings rather than a separate cash payment.