For the past few months, traditional exchanges have been on quite a partnership streak. The most sought-after name? Payward, the parent company of crypto exchange Kraken.

This week, it added the London Stock Exchange to its friendship book. On Tuesday, the two announced that the 100 largest LSE-listed companies will be tokenized "in the coming weeks" as xStocks, the tokenized-equity standard owned by Payward.

Beyond the wrappers, the two firms will also explore native onchain issuance, aiming for shares that carry the same rights as, and stay fully fungible with, traditional stock.

For Payward, it's the third major exchange on the list, after Deutsche Börse and Nasdaq, though each deal covers a different part of the stack:

Deutsche Börse is live today. Institutional investors can trade Tesla and Nvidia xStocks on its regulated 360X venue.
Nasdaq is building the gateway. It plans to use xStocks as the bridge for stocks to hop between regulated markets and open blockchains, with Nasdaq's own full-rights tokens planned for 2027.
LSEG goes deepest. Tokenized versions of its 100 largest listed companies now, LSE 24 trading in 2027, and possibly settlement through its own digital securities depository.

The bet behind the London deal is that outside UK capital markets, there are onchain investors who'd like HSBC, Shell, or Rolls-Royce sitting in their wallet.

And if the demand shows up, tokenization might be the first real counter European exchanges have found to the slow bleed of listings toward New York.

As for Payward, the playbook is unmistakably ecosystem. In a market that mints a new tokenized-equity standard every other week, it's trying to win the old-fashioned way: by being the one everyone already uses.

IN TODAY’S BRIEFING:

21 major banks and financial institutions announce the launch of a dollar stablecoin
ICE appoints tZERO as the second design partner for its tokenization platform

WITH INSIGHTS FROM

_{Severin Kranz}
_21X

_{Olivia Vande Woude}
_{Ava Labs}

_{Alan Konevsky}
_tZERO

HIGH SIGNAL NEWS

21 major banks and financial institutions announce the launch of a dollar stablecoin. The yet-to-be-named company aims to launch a USD stablecoin in the first half of 2027, with other G7 currencies planned for a later stage. Previously announced in October with 10 member banks, including Bank of America, Santander and UBS, the initiative, unofficially known as FARO, has now been joined by Fidelity Investments, BBVA and Commerzbank. 🌍️
BNP Paribas joins the European tokenized deposit network CBMT. Less than two weeks ago, Dutch bank ABN AMRO also became a member. The initiative, whose participating banks already include DZ Bank, Commerzbank, UniCredit and Helaba, launched a shared sandbox in November 2025 to facilitate the testing of multi-bank tokenized deposit solutions. 🇪🇺
Erste Group, RBI and OeKB CSD are collaborating on a digital securities settlement pilot. Called DELPHI, the initiative brings together the two Austrian banks and the country’s central securities depository, with Frankfurt-based start-up SWIAT serving as the technology and infrastructure partner. 🇦🇹
CARI Network raises $32.5 million exclusively from U.S. banks. Formed in September 2025, the tokenized deposit consortium brings together around 40 U.S. regional banks and is targeting a production launch in Q4 2026. 🏦
S&P Dow Jones and Kaiko bring their crypto indices together under a single brand. Under the new S&P Kaiko Digital Asset Indices suite, the largest independent institutional digital-asset data provider will supply the crypto market data and calculate the indices, while S&P will oversee, license and distribute them. 🇺🇸

TOP STORY

NYSE Selects tZERO as Second Partner for Its Tokenization Platform

Design partner: On Monday, Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), and market-infrastructure provider tZERO announced a memorandum of understanding that makes tZERO a design partner for NYSE’s upcoming tokenized securities platform. The collaboration covers two infrastructure layers surrounding the planned venue: digital transfer-agent functions and broker-dealer access for tokenized securities.

Not a new relationship: tZERO was founded in 2014 as a subsidiary of Overstock and spent most of a decade building regulated infrastructure for tokenized securities before ICE arrived as a shareholder. In 2022, the exchange group led tZERO’s Series B. That same year, David Goone left ICE’s executive ranks to become tZERO’s CEO, a position now held by Alan Konevsky.

Why it matters: There are two ways to bring securities onchain in US markets, and NYSE is now pursuing both. The simpler one changes little: the share stays at DTC, trades on the existing order book and is tokenized afterwards. Nasdaq won approval for this in March, and NYSE has been able to offer it since May. The second is a separate NYSE-affiliated venue where securities can be issued, recorded and settled onchain from the start, and among the two big US exchanges only NYSE is building one. That venue only works once transfer agents, custodians and broker-dealers have connected to it. tZERO’s job is to help design two of those three connections.

“There’s room for firms to bring different strengths here. We’ve built our infrastructure to serve institutions across the board, while working particularly closely with traditional banks and broker-dealers,” tZERO CEO Alan Konevsky told Blockstories.

The broker bottleneck: That broker-dealer focus matters because distribution remains one of the harder pieces to solve. FINRA counts roughly 3,200 member firms, yet Konevsky says the vast majority are neither approved nor technically equipped to handle tokenized assets for clients. NYSE cannot simply bypass that layer and deal with investors directly.

“If I’m a broker-dealer and I’m looking to get access to NYSE’s tokenized public equities platform, I’m going to need someone to help me custody these shares on behalf of my customers and be a gateway to the platform,” Konevsky said. tZERO sees itself as precisely that regulated bridge: broker-dealer and custody infrastructure combined with connectivity into the new marketplace.

Transfer agents move onchain: The other half of tZERO’s mandate is the ownership register itself. Traditionally, transfer agents maintain the authoritative record of who owns a security and process corporate actions such as dividends, votes and stock splits. In a tokenized system, that record can increasingly sit on the blockchain itself. The transfer agent stays legally responsible for it; what changes is where it lives.

The SEC catches up: SEC staff said in a May 2025 FAQ that a registered transfer agent may use a blockchain as its official master securityholder file, or part of it, with holder identity data kept offchain. On September 1, the SEC proposed writing that approach into a transfer-agent rulebook that has barely changed since the 1980s. The transfer agent would stay responsible for the authoritative record. What happens when that record sits on a ledger the agent does not fully control is one of the questions the SEC has put out for comment.

The existing rails: All of that applies to NYSE’s second route. The first changes far less. Since May, NYSE members have been allowed to trade eligible stocks on the existing order book and request that the shares be delivered in tokenized form. The trade still settles through DTC on a T+1 basis, as it does today, after which DTC issues the corresponding tokens.

What decides it: Which of the two routes ends up carrying real volume is not NYSE’s call alone. The DTC route runs on intermediaries the market already has. The separate venue depends on broker-dealers that, by Konevsky’s count, have mostly not started. NYSE is building both. This suggests that the agreement is aimed primarily at the more infrastructure-intensive route.

Severin Kranz is the Head of Business Development at 21X, the first regulated trading and settlement infrastructure for digital assets under the European DLT Pilot Regime.

What is driving traditional exchanges’ current push into tokenization, and what does their positioning reveal about their broader strategy?

Traditional exchanges are under growing pressure from a more supportive US regulatory environment and crypto platforms expanding into tokenized securities.

Their initial response is partnering with crypto-native firms to launch tokenized equities in the form of wrappers. This allows them to move quickly, signal their ambitions, and reach wallet-based investors. This is reflected in Kraken’s partnerships around xStocks with Nasdaq, Deutsche Börse and, most recently, the London Stock Exchange.

However, wrappers offer limited value to their existing client base, which already has access to the underlying securities through more robust infrastructure. The real institutional opportunity lies in natively tokenized securities that carry the same rights as their traditional equivalents while operating on more efficient rails.

This requires a deeper transformation. Traditional exchanges are therefore developing transfer-agent capabilities, working on onchain settlement, and 24/7 capabilities, as illustrated by ICE’s partnerships with OKX, Securitize, and tZERO.

Olivia Vande Woude is Head of Tokenization at Ava Labs, the blockchain infrastructure company behind Avalanche, a Layer 1 focused primarily on serving financial institution.

How far can a market-infrastructure provider such as ICE advance on its own?

No exchange can tokenize a market by itself, and that explains the shape of ICE’s buildout. ICE owns NYSE and its matching engine, writes the rules for its clearing houses and sets the standards for transfer agents on its platform.

Everything else depends on others. The depository has to tokenize what it holds. Issuers have to agree that a token is legally the same share. Brokers have to plug in. Clearing members have to accept onchain cash. ICE cannot force that, so it signs one agreement at a time: Securitize and tZERO for the record-keeping, BNY and Citi for the cash.

The depository has moved first. DTC has SEC staff relief to tokenize, and since May tokenized shares trade on NYSE’s order book under the same CUSIP. ICE’s separate round-the-clock venue, still awaiting approvals, builds on that.

Cash has not moved. The venue can transfer title at any hour, but a trade is only final when cash moves too. Until then, ICE has sped up half a settlement. Tokenization is as much a coordination challenge as a technology one: institutions should be able to build around their own compliance, privacy and performance requirements while connecting to the wider market.

Institutional Business Development Cycle
Illustration: Blockstories

AMINA: Executive Director B2B Sales, Zug 🇨🇭
Baillie Gifford: Director, Digital Assets, Edinburgh 🏴󠁧󠁢󠁳󠁣󠁴󠁿
Barclays: Director, Digital Assets Controls, London 🇬🇧
ING: Commercial Product Manager Digital Assets, Amsterdam 🇳🇱
Intesa Sanpaolo: Software Engineer, Blockchain & Digital Asset, Milan 🇮🇹
Janus Henderson: Director, Digital Asset Operations, London 🇬🇧
Swissquote: Site Reliability Engineer - eFX/ Crypto, Gland 🇨🇭
Unicaja: Blockchain and Digital Assets Product Owner, Madrid 🇪🇸

Financial Innovation and the International Monetary System (Gordon Liao, Eswar Prasad & Tony Zhang) — This paper examines how stablecoins, tokenization and faster cross-border payment systems could reshape the international monetary system. While these innovations could theoretically level the playing field between currencies, the authors argue that dollar-backed stablecoins are more likely to reinforce the dollar’s dominance by making dollar assets easier to access and use globally.
Tokenized Finance and the Perimeter of Central Banking (Darrell Duffie) — An analysis of why large-scale tokenized finance requires safe, programmable central-bank money and how central banks can support 24/7 settlement without expanding access to their balance sheets or undermining financial stability.

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Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.