Key Takeaways
- Crédit Agricole has acquired a minority stake in Kriptown.
- The French startup plans to launch a blockchain-based stock exchange for small- to medium-sized businesses.
- EU regulation is shaping the rollout of tokenized equities in the region.
Although interest in tokenized equities has surged recently, securities exchanges have yet to adopt the technology, leaving it up to digital platforms like Kraken and Robinhood to develop derivative products.
However, with backing from Crédit Agricole, French startup Kriptown intends to launch Europe’s first truly on-chain stock exchange, Lise.
The exchange is expected to list the first small—to medium-sized businesses (SMBs) later this year.
Tokenized Stocks vs. Stock Tokens
While the terms are often used interchangeably, true tokenized stocks differ from the wave of “stock tokens” that have emerged in recent months.
Whereas stock tokens listed by Kraken, Coinbase and others, are issued on-chain, the underlying assets they represent are still traditional equities, usually held in custody by a special purpose vehicle.
In contrast, tokenized stocks, like the ones that will be offered by Lise, aren’t just representations of traditional shares. They are actually issued and settled using blockchain-native infrastructure.
Tokenizing Small Cap Stocks
Tokenization offers important advantages for the small businesses Lise is targeting.
These companies don’t have access to the same resources as large corporations, which can restrict access to public market financing.
Lise’s new infrastructure is proposed as a way of “reducing the costs associated with IPOs and public listings.”
While major securities exchanges like the London Stock Exchange are actively exploring tokenization, startups like Kriptown have taken the lead, and small cap stocks have emerged as an ideal testing ground for the concept thanks to favorable EU regulation.
The EU’s Tokenization Regime
In 2023, the European Securities and Markets Authority (ESMA) explicitly excluded large corporations from its DLT Pilot Regime, which will run until at least 2026.
This ensures that the first wave of blockchain innovation in EU financial markets targets companies valued at less than 500 million euros and bond issuances of less than 1 billion euros.
Kriptown has applied for approval to operate a trading facility under the pilot regime. If approved, it would become the second fintech after Germany’s 360X licensed to operate a trading venue for tokenized financial instruments.
Major Players Back Blockchain Champions
Although startups are leading Europe’s charge into tokenized stocks, they have the support of heavyweight financial institutions.
On Monday, Aug. 4, Crédit Agricole subsidiary CASEIS announced that it had acquired a minority stake in Kriptown.
Meanwhile, 360X emerged from a partnership between Deutsche Börse and Commerzbank, which together own a majority stake in the venture.
Finally, the EU’s largest stock exchange operator, Euronext, has thrown its weight behind Tokeny, a Luxembourg-based startup focused on tokenizing debt, funds, private equity and real estate.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
