LSE Group draws up plans for blockchain-based digital assets business

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Source: Financial Times

The London Stock Exchange Group has drawn up plans for a new digital markets business, saying this will make it the first major exchange to offer extensive trading of traditional financial assets on the blockchain technology best known for powering cryptocurrency.

The company had been examining the potential for a blockchain-powered trading venue for around a year and reached an “inflection point” where it decided to take plans forward, Murray Roos, head of capital markets at the LSE Group, told FT in an interview.

Blockchain is a digital ledger which records and verifies transactions.

LSE is not building anything around cryptoassets but it is looking to use the technology that underpins tokens like bitcoin to improve the efficiency of buying, selling and holding traditional assets, Roos told FT.

“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, which is considering using a separate legal entity for the digital markets business, hopes to have the first market up and running within the next year, subject to regulatory approval.

The company is already in talks with regulators, multiple jurisdictions, as well as the government and Treasury in the UK.

The reported move comes at a time when a number of mainstream financial institutions are talking about the potential for blockchain to streamline the process of issuing and trading financial assets.

Recent Data from the European securities regulator Esma showed that just $800mn of traditional assets had been tokenised — or put on the blockchain — so far.