Kraken parent Payward shifts position on tokenized equities and voting rights

Payward, the parent company of cryptocurrency exchange Kraken, is changing its approach to how holders of tokenized equities can participate in corporate governance.

While xStocks holders previously had no voting rights for the underlying shares, a collaboration with Broadridge will now allow eligible investors to submit proxy voting preferences, according to a Wednesday release.

"The endgame for tokenization was never just building faster programmable capital markets. It's about giving people across the world everything that comes with owning a piece of a company, including a voice in how it's run," Payward Chief Commercial Officer Mark Greenberg said. "Working with Broadridge is a step in that direction, unlocking opportunities for xStocks holders to participate in corporate governance, while closing the gap between tokenized equities and traditional shares."

Issued by Backed, xStocks are tokenized equities available to eligible investors outside the U.S. Broadridge provides digital asset infrastructure, including proxy voting, post-trade services, wallets and custody.

Currently, xStocks are not available to investors in the United States or the United Kingdom, or to U.S. persons. However, last month, Payward said it partnered with fintech infrastructure provider GTN to expand its xStocks offering to include stocks trading in Hong Kong, with plans to eventually expand to the UK, Europe, South Korea and other international markets.

In the U.S., the push to tokenize equities has been gaining traction, with both blockchain-native firms and traditional-finance heavyweights such as JPMorgan and Goldman Sachs showing interest in moving securities onchain.

Kraken said earlier this year that volume for xStocks had surpassed $25 billion in total transaction volume since going live last year.