Kraken’s parent company brings one of Wall Street’s most coveted opportunities to crypto investors: buying into IPOs at the same price as institutional investors.
Payward, the parent company of the crypto exchange, said on Wednesday that it will “soon” allow clients of Kraken and other members of its xStocks Alliance to participate in US-listed initial public offerings through tokenized shares. The offering would give eligible investors a chance to receive awards at the IPO price instead of buying shares after trading begins on public markets.
The first tokenized IPO offerings are expected to become available through Kraken and other xStocks Alliance members in the coming weeks, the firm said.
The launch comes as investors await a new crop of high-profile public offerings. SpaceX and AI startups Anthropic and OpenAI are among the companies widely seen as potential IPO candidates in the coming months, fueling demand for access to deals that have traditionally been dominated by institutional investors, private banks and wealthy clients.
Under Payward’s model, investors would submit non-binding indications of interest prior to an IPO. The company would aggregate demand across participating exchanges and work with underwriting syndicates to secure allocations. Once a company is listed, shares will be tokenized, backed one-to-one by the underlying stock held by a regulated custodian bank and distributed to investors through 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 treasuries, private credit, money market products and, increasingly, equities.
Proponents argue that tokenization can make assets easier to access, transfer and trade across jurisdictions. For stocks, technology can help remove some of the geographic and brokerage barriers that have historically limited access to IPOs and foreign-listed stocks.
Still, pre-IPO investment carries risks. IPO allocations are often oversubscribed and not guaranteed, offering prices can change during the book-building process, and newly listed stocks often experience sharp price swings when public trading begins.
The firm will only offer IPOs where it has secured allocations to investors, a Payward spokesperson told CoinDesk.
Payward said its xStocks framework currently supports tokenized stocks that are backed one-to-one by underlying stocks held in custody. The company said the framework has processed more than $30 billion in transaction volume and over $6 billion in onchain settlements across more than 125,000 holders.
