Kraken’s parent company offers crypto investors one of the most coveted opportunities on Wall Street: participating in IPOs at the same price as institutional investors.
Payward, the crypto exchange’s parent company, said Wednesday that it will “soon” allow customers of Kraken and other members of its xStocks alliance to participate in U.S.-listed initial public offerings via tokenized shares. The offering would give eligible investors the opportunity to receive allocations at the IPO price rather than purchasing shares after trading begins on the public markets.
The first tokenized IPO offerings are expected to be available through Kraken and other members of the xStocks Alliance in the coming weeks, the company said.
The launch comes as investors await a new crop of high-profile public offerings. SpaceX and AI startups Anthropic and OpenAI are among companies widely seen as potential IPO candidates in the coming months, fueling demand for access to deals traditionally dominated by institutional investors, private banks and wealthy clients.
Under Payward’s model, investors would submit non-binding expressions of interest before an IPO. The company would pool demand on participating exchanges and work with underwriting syndicates to secure allocations. Once the company is listed, shares would be tokenized, backed one-for-one by the underlying shares held by a regulated custodian and distributed to investors via participating platforms.
The initiative is part of a broader push to use blockchain technology to expand access to capital markets.
Tokenization – the process of creating blockchain-based representations of traditional assets – has become one of the fastest growing areas of digital assets. The sector has expanded beyond cryptocurrencies to include treasury funds, private credit, money market products and, increasingly, equities.
Proponents argue that tokenization can facilitate access, transfer and exchange of assets across jurisdictions. For stocks, technology could help eliminate some of the geographic and brokerage barriers that have historically limited access to IPOs and foreign-listed stocks.
Still, pre-IPO investments come with risks. IPO allocations are often oversubscribed and unsecured, offering prices can change during the bookbuilding process, and newly listed stocks frequently experience large price fluctuations once public trading begins.
The company will only offer IPOs in cases where it has secured investor allocations, a Payward spokesperson told CoinDesk.
Payward said its xStocks framework currently supports tokenized stocks backed one-to-one against the underlying stocks held. The company said the framework has processed over $30 billion in transaction volume and over $6 billion in on-chain settlements for over 125,000 holders.
