- The London Stock Exchange Group (LSEG) is set to establish a blockchain-driven digital markets business
- After nearly a year of exploration, LSEG is moving forward with its plans, pending regulatory approval from multiple jurisdictions
- LSEG’s blockchain initiative prioritizes enhanced asset trading security and efficiency while complying with regulatory standards
The London Stock Exchange Group (LSEG) is expanding its blockchain plans to include an ambitious initiative to establish a blockchain-powered digital markets business. The group wants to use blockchain technology, which it has been exploring for some time, to revolutionize the trading of traditional financial assets. The move will not see any cryptocurrencies themselves used but will instead make use of the technology underpinning it.
Year-long Research Bears Fruit
The plan was outlined by Murray Roos, Head of Capital Markets at LSE Group, who told the Financial Times that after nearly a year of assessing the feasibility of blockchain-powered trading solutions, LSEG has reached a pivotal “inflection point” and is now gearing up to advance its ambitious plans. The group is even contemplating the creation of a unique legal entity specifically for its digital markets venture.
However, the actualization of these plans is contingent on regulatory approvals, and LSEG is currently in discussions with regulatory bodies in multiple jurisdictions, including consultations with the UK government and Treasury.
No Crytpo Use
Roos was keen to stress that LSEG’s intentions do not revolve around cryptocurrencies themselves but will instead focus is on leveraging blockchain technology to enhance the security and accessibility of asset trading, as Roos explained to the Financial Times:
The idea is to use digital technology to make a process that is slicker, smoother, cheaper and more transparent . . . and to have it regulated.
LSEG’s initiative aligns with a broader trend in the financial sector — the rising interest in asset tokenization. By enabling fractional ownership of assets, tokenization not only enhances liquidity but also democratically opens access to traditionally illiquid assets.
This shift is seen as a game-changer within the financial industry, with the potential to reshape how traditional financial assets are bought, sold, and traded.