What xStocks Are and Why UK Investors Can’t Buy Them

Payward, the parent company of crypto exchange Kraken, and the London Stock Exchange Group announced plans to tokenise the 100 largest UK-listed companies as xStocks. Payward intends to offer its xStocks to eligible investors in more than 100 jurisdictions within weeks using a Jersey-backed issuance route. LSEG has said its Digital Securities Depository could handle settlement and plans to list xStocks on a proposed 24-hour trading venue, LSE 24, from 2027, subject to regulatory approval.

An xStock is a digital token backed one-for-one by an actual share. Under the announced structure, an issuer buys the underlying share on the open market through Backed Assets (JE) Limited, a Jersey-registered vehicle, deposits the share with a regulated custodian and then mints a token that represents that share. GTN provides international execution, custody and recordkeeping for the arrangement. Once minted, the token can be moved between blockchains, traded on exchanges, held in private wallets and used in decentralised finance. Fractional ownership is available from as little as $1.

Redemption reverses the steps: the token is burned, the custodian sells the underlying share and the sale proceeds are returned to the holder. Net new issuance of xStocks requires the purchase of shares on the open market, creating buy-side demand for the underlying equity in the same way that physically backed exchange-traded funds do. Most trading to date, however, has been secondary trading of existing tokens and has not affected the underlying shares.

The xStocks framework has recorded just over $40 billion in total volume in a little more than a year, including nearly $20 billion settled on-chain, and more than 200,000 holders, according to the companies’ figures.

UK retail investors have been excluded from these offerings because regulators and the government treat xStocks differently from conventional shares. Because an xStock is a token rather than a share, transactions can avoid stamp duty on share trading. The potential loss of stamp duty revenue has prompted UK authorities to consider alternatives, including a single securities transfer tax. The Financial Conduct Authority’s ban on retail crypto derivatives remains in force, and recent changes to rules on retail crypto ETNs and fund tokenisation do not explicitly cover xStocks, leaving their domestic regulatory status unresolved.

The Bank of England and the FCA published a joint Call for Input on May 18, 2026, to inform a shared roadmap for tokenised securities including cash equities. That work aims to keep settlement anchored in central bank money, with a target for delivery in 2028. LSEG has indicated it would support settlement in its Digital Securities Depository and would seek to list xStocks on LSE 24 from 2027, subject to regulatory clearance. It is not yet clear whether a 2027 listing would rely on a change in the FCA’s treatment of offshore issuance or require a separate UK-authorised product.

The design of xStocks links on-chain tokens to traditional custody and settlement systems while adding programmability and fractional access. Because minting requires buying shares and redemptions require selling them, net issuance and redemptions can have direct effects on the securities market when they occur. Industry participants point to tax and regulatory questions as the main barriers to offering the same product to UK-based retail investors.