LSE Plans Pioneering Blockchain-Based Digital Markets Venture

Updated: 04 September 2023

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The London Stock Exchange (LSE) plans a digital markets business to pioneer the trading of traditional financial assets using blockchain technology, the Financial Times reported.

The exchange has spent about a year exploring the viability of a trading platform powered by blockchain, head of capital markets Murray Roos told the FT. Julia Hoggett, CEO at the London Stock Exchange, is leading the project, he said.

The project is not focused on crypto assets but aims to utilize blockchain technology to optimize conventional asset trading, Roos told the FT.

The primary goal is a system that simplifies trading and lowers costs for buying, selling, and holding traditional assets, he said.

“The idea is to use digital technology to make a process that is slicker, smoother, cheaper and more transparent . . . and to have it regulated,” Roos told the FT, adding that the LSE feels investors are ready for the development.

Pretty big news

The London Stock Exchange is exploring the potential for using blockchain to improve the trading process for "traditional assets"

The infrastructure would not support "crypto assets"https://t.co/86OReYyEM6

— Raphaël Bloch 🐳 (@Raph_Bloch) September 4, 2023

LSE Exploring Separate Legal Entity

LSE is exploring establishing a separate legal entity to manage its digital markets business and it aims to launch its first market within the coming year, said Roos. It is in discussions with various regulators, including the UK government and the Treasury, Roos added.

Roos envisions a global platform enabling participants across various jurisdictions to interact seamlessly while adhering to rules and regulations, he said.

“The ultimate goal is a global platform that allows participants in all jurisdictions to be able to interact with people in other jurisdictions completely abiding by rules, laws and regulations, potentially multiple jurisdictions simultaneously, which is something that hasn’t been possible in an analogue world,” Roos said.

The venture will focus on private markets initially due to their cumbersome and opaque nature, after which it would be expanded to other assets, Roos said.

The FT said that data from the European Securities and Markets Authority shows that just $800 million of traditional asset have been put on the blockchain so far.

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