Kraken’s parent company is bringing one of Wall Street’s most coveted opportunities to cryptocurrency investors: buying IPOs at the same price as institutional investors.
Payward, the parent company of the crypto exchange, said on Wednesday that it will “soon” allow customers 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 the opportunity to receive allocations at the IPO price instead of purchasing shares after trading begins in the public markets.
The first tokenized IPO offerings are expected to be available through Kraken and other xStocks Alliance members in the coming weeks, the firm said.
The launch comes as investors await a new generation 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 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 ahead of an IPO. The company would aggregate demand on participating exchanges and work with underwriting syndicates to secure allocations. Once a company goes public, the shares would be tokenized, backed one by one by the underlying shares held by a regulated custodian, 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 into Treasury funds, private credit, money market products and, increasingly, stocks.
Supporters argue that tokenization can facilitate the access, transfer and trading of assets between jurisdictions. In the case of stocks, technology could help remove some of the geographic and brokerage barriers that have historically limited access to IPOs and foreign-listed stocks.
Still, pre-IPO investing carries risks. IPO allotments are often oversubscribed and not guaranteed, offering prices can change during the book-building process, and newly listed stocks frequently experience wild price swings once public trading begins.
The company will only offer IPOs where it has secured allocations for investors, a Payward spokesperson told CoinDesk.
Payward said its xStocks framework currently supports tokenized stocks backed one-for-one by underlying stocks held in custody. The company said the framework has processed more than $30 billion in transaction volume and more than $6 billion in on-chain settlements among more than 125,000 holders.
