The London Stock Exchange is exploring tokenized shares that preserve shareholder rights through a September 1 partnership with Payward, while separately planning to list xStocks on its LSE 24 venue in 2027, subject to regulatory approval. Kraken’s xStocks track underlying share prices but grant no shareholder voting rights and reflect dividend benefits through adjusted exposure rather than cash payments. Using these tokens as collateral to borrow can amplify losses substantially: in an example where an investor borrows 50% of their stake, a 20% price decline wipes out 30% of their equity. The Financial Stability Board assessed in 2024 that tokenization’s current scale does not pose material systemic risk, but warned about potential amplification effects from easier collateralized borrowing if adoption expands significantly.
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