Blockchain
technology is primarily associated with cryptocurrencies, but its applications
seem to be limitless. The London Stock Exchange Group (LSEG) has decided to tap
into the potential of distributed ledger technology as it prepares to launch a
new business arm focused on digital markets. The company claims it will be the
first major exchange to offer trading in traditional financial instruments
using blockchain technology.
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The news
was first reported by Financial Times, which spoke with Murray Roos, the
Head of Capital Markets at the LSE Group. According to the conversation, the
company has tested various blockchain trading solutions for over a year. Julia
Hoggett, the Head of the London Stock Exchange, has been asked to lead the new
project.
LSEG’s
offering will not be related to cryptocurrencies. Instead, it aims to use
blockchain technology to improve key features associated with trading
traditional investment products.
“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 said in a
conversation with the Financial Times.
Keep Reading
Although
there are already several solutions in the market that utilize blockchain for
trading, LSEG claims that none of them do it comprehensively, covering only
certain parts of the entire investment process. The London Stock Exchange aims to use
distributed ledger technology to oversee the whole process, from issuance to
trading and settlement.
The new
business is not intended to compete with the traditional exchange but to
complement its offerings. The company will establish a separate legal entity to
manage the venture. If it succeeds in obtaining all the necessary regulatory
approval in the UK, the blockchain-powered trading solution should be
available to investors next year.
How Blockchain Can
Streamline Exchange Operations
According
to Roos, the main goal of the blockchain solution is to provide access to
financial instruments regardless of the jurisdiction in which the parties to
the transaction are located.
He cited an
example involving investors from different countries: a buyer from Switzerland,
an American seller, and an asset from Japan. In the traditional market, a
transaction between these parties would be complicated, but blockchain technology will
make it quick, simple, and secure.
Initially,
the solution will be applied to private markets, increasing access to the available
products and instruments. If the ‘experiment’ is successful, the service will
be expanded to other markets.
The Future Lies in
Tokenization
For LSEG, this is not their first venture into blockchain and tokenization. In 2019, the exchange operator invested in the bond tokenization startup Nivaura. Two years earlier, the company announced that it would use blockchain technology to digitize the issuance of securities for small and medium enterprises (SMEs) in Europe.
So far,
assets worth $800 million have been ‘tokenized’ in the European market. The
launch of LSEG’s product would undoubtedly boost this value. Some traditional
industry representatives believe tokenization is the future of financial
markets and the next revolution that awaits them.
Among them
is Larry Fink, the Chief Executive of BlackRock, the world’s largest asset
manager. BlackRock applied a few months ago to create its own ETF tracking
Bitcoin spot prices, triggering a wave of subsequent applications and optimism
in the charts of digital assets.
Although
the SEC (US regulator) is blocking the acceptance and delaying the final
decision of these products, the industry is convinced that cryptocurrency ETFs in the US will be released in only a matter of time.
Blockchain
technology is primarily associated with cryptocurrencies, but its applications
seem to be limitless. The London Stock Exchange Group (LSEG) has decided to tap
into the potential of distributed ledger technology as it prepares to launch a
new business arm focused on digital markets. The company claims it will be the
first major exchange to offer trading in traditional financial instruments
using blockchain technology.
The news
was first reported by Financial Times, which spoke with Murray Roos, the
Head of Capital Markets at the LSE Group. According to the conversation, the
company has tested various blockchain trading solutions for over a year. Julia
Hoggett, the Head of the London Stock Exchange, has been asked to lead the new
project.
Discover StealthEX.io – the future of cryptocurrency. Swap instantly across 1000+ coins, no sign-up, secure, and private. Dive into the new age of crypto!
LSEG’s
offering will not be related to cryptocurrencies. Instead, it aims to use
blockchain technology to improve key features associated with trading
traditional investment products.
“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 said in a
conversation with the Financial Times.
Keep Reading
Although
there are already several solutions in the market that utilize blockchain for
trading, LSEG claims that none of them do it comprehensively, covering only
certain parts of the entire investment process. The London Stock Exchange aims to use
distributed ledger technology to oversee the whole process, from issuance to
trading and settlement.
The new
business is not intended to compete with the traditional exchange but to
complement its offerings. The company will establish a separate legal entity to
manage the venture. If it succeeds in obtaining all the necessary regulatory
approval in the UK, the blockchain-powered trading solution should be
available to investors next year.
How Blockchain Can
Streamline Exchange Operations
According
to Roos, the main goal of the blockchain solution is to provide access to
financial instruments regardless of the jurisdiction in which the parties to
the transaction are located.
He cited an
example involving investors from different countries: a buyer from Switzerland,
an American seller, and an asset from Japan. In the traditional market, a
transaction between these parties would be complicated, but blockchain technology will
make it quick, simple, and secure.
Initially,
the solution will be applied to private markets, increasing access to the available
products and instruments. If the ‘experiment’ is successful, the service will
be expanded to other markets.
The Future Lies in
Tokenization
For LSEG, this is not their first venture into blockchain and tokenization. In 2019, the exchange operator invested in the bond tokenization startup Nivaura. Two years earlier, the company announced that it would use blockchain technology to digitize the issuance of securities for small and medium enterprises (SMEs) in Europe.
So far,
assets worth $800 million have been ‘tokenized’ in the European market. The
launch of LSEG’s product would undoubtedly boost this value. Some traditional
industry representatives believe tokenization is the future of financial
markets and the next revolution that awaits them.
Among them
is Larry Fink, the Chief Executive of BlackRock, the world’s largest asset
manager. BlackRock applied a few months ago to create its own ETF tracking
Bitcoin spot prices, triggering a wave of subsequent applications and optimism
in the charts of digital assets.
Although
the SEC (US regulator) is blocking the acceptance and delaying the final
decision of these products, the industry is convinced that cryptocurrency ETFs in the US will be released in only a matter of time.
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