In a move that could redefine the landscape of traditional asset trading, the London Stock Exchange Group (LSEG) has announced plans to create a blockchain-based digital market ecosystem, according to a report by the Financial Times. However, the initiative aims to streamline the raising and transfer of capital across various asset classes.
Murray Roos, the head of capital markets at LSEG, indicated that the organization had reached an “inflection point” in its year-long exploration of blockchain’s potential for trading venues.
LSEG’s strategy: Enhancing efficiency, not cryptocurrency trading
Contrary to what some might assume, given blockchain’s association with cryptocurrencies, LSEG clarified that the focus would not be on crypto assets. Instead, the technology would be harnessed to improve the efficiency of buying, selling, and holding traditional assets. Roos emphasized the group’s objective is to create a “slicker, smoother, cheaper, and more transparent” process while ensuring that the system would be regulated.
LSEG’s digital asset market will be subject to regulatory approvals. Also, the LSEG aims to have this entity operational within a year. The company has already initiated discussions with regulators, multiple jurisdictions, the British government, and the Treasury.
The announcement by LSEG comes at a time when mainstream financial institutions are increasingly acknowledging the potential of blockchain technology. If the plan comes to fruition, LSEG could become the first major global stock exchange to offer an end-to-end blockchain-powered ecosystem for investors.
This move indicates a broader trend where traditional financial infrastructures are warming up to integrating blockchain technology. For instance, the bank messaging network SWIFT recently shared a report on how it could connect with blockchains to solve the problem of interoperability between various blockchain networks.
Roos stated that the LSE Group waited until investors and blockchain technology were ready before proceeding with the project. This calculated approach underscores LSEG’s commitment to ensuring that the technology is not just a buzzword but a viable, efficient solution for traditional asset trading.
If the plan is successful, the LSE Group will become the first major global stock exchange to offer a blockchain-powered ecosystem for investors.