Payward and GTN bring Hong Kong stocks to tokenized xStocks platform

Payward cooperates with GTN: Including Hong Kong stocks in tokenized stock platform xStocks

Payward, the parent company of cryptocurrency exchange Kraken, announced that it plans to expand its business scope by working with investment infrastructure provider GTN to include Hong Kong-listed stocks in its xStocks tokenized stock platform. The move marks the first time Payward's xStocks framework has included non-U.S. stocks, and may in the future cover stocks listed in the UK, Europe and South Korea, subject to regulatory approval from each jurisdiction.

Tokenized Stock Expansion

Payward's cooperation with GTN will first launch tokenized stocks related to companies listed on the Hong Kong Stock Exchange. Payward emphasized that all new market launches must first obtain approval from financial regulators before they can be opened to investors.

Payward's xStocks framework aims to provide investors with traditional stock tokenized investment channels through blockchain technology. The platform was first launched last year and provides tokenized versions of U.S. stocks and exchange-traded funds.

Currently, the xStocks platform covers more than 500 securities, and the cumulative transaction volume has exceeded US$35 billion. Nearly 200,000 holders are using the platform, but the service is temporarily closed to U.S. investors.

GTN is a global investment infrastructure provider with access to more than 90 financial markets. After approval, GTN will be responsible for the execution, custody and record-keeping of underlying securities related to tokenized stocks and plans to provide xStocks products to its institutional clients.

Mark Greenberg, Payward's global director of services, described the international market as "the largest untokenized asset class." He said the company's goal is to gradually integrate all global capital markets into blockchain.

Mark Greenberg emphasized that the company aims to "incorporate all global capital markets into blockchain in a step-by-step manner" as part of its broader tokenization strategy.

Neither Payward nor GTN has clarified specific asset types that may be expanded in the future, but both parties said that the cooperation has built the necessary infrastructure for potential growth beyond stock tokens.

Tokenized stocks are attracting more and more attention

As cryptocurrency companies and traditional financial institutions expand their businesses, competition in the tokenized stock market is becoming increasingly fierce. Robinhood has recently offered stock tokens to users outside Europe;Coinbase is also preparing to launch its own tokenized stock products.

Major U.S. stock exchanges and post-trade service providers, including the Depository, Trust and Clearing Corporation (DTCC), are advancing blockchain securities infrastructure testing to promote the tokenization of traditional securities.

Proponents of tokenized stocks emphasize that blockchain networks enable faster settlement and round-the-clock transaction execution. These innovations are also expected to improve the efficiency of asset transfers and reduce reliance on traditional intermediaries.

Citigroup estimates that by 2030, the total value of tokenized securities could reach US$5.5 trillion, of which tokenized stocks are expected to be US$2.6 trillion.

To date, most tokenized stock products have been linked to large U.S. companies such as Nvidia, Apple and Tesla. The introduction of Hong Kong-listed stocks will hopefully give eligible investors access to Asian companies, including those engaged in artificial intelligence supply chains, but only if they obtain regulatory approvals from various regions.

Platforms/operators and current and planned markets

Payward xStocks: The current tokenization market is U.S. stocks and ETFs; plans to expand to Hong Kong, the United Kingdom, Europe, and South Korea (pending approval).

Robinhood: Currently offering U.S. stock tokens to non-European users; no clear plans.

Coinbase: Preparing to launch tokenized shares (unspecified region).

Regulatory Requirements and Outlook

For each new market or asset class added to xStocks, Payward and GTN must obtain approval from local regulators. xStocks 'infrastructure relies on third-party issuers to buy and hold traditional stocks, which are then tokenized on the blockchain. Some industry participants have promoted native issuance on blockchain to eliminate intermediaries completely.

The growing interest in digital securities is attracting more attention from financial regulators and market infrastructure companies. Regulatory approval will determine when and where Payward and GTN launch new tokenized products or expand asset coverage.

Payward is the parent company of Kraken, the world's leading cryptocurrency exchange established in 2011. GTN provides a global investment infrastructure that allows financial institutions to access a wide range of capital markets.

Small Dictionary: GTN-This investment infrastructure company provides order routing, execution, clearing and settlement services to financial institutions and has access to more than 90 international stock markets.

Payward's collaboration with GTN comes amid ongoing debate within the financial industry over whether tokenized stocks should be issued through third-party custodians or directly on blockchain networks (without intermediaries).