LSEG explores blockchain for cross-asset digital ‘ecosystem’

(Reuters) – London Stock Exchange Group is looking into using blockchain to build what it described on Monday as “an end-to-end digital market ecosystem to raise and transfer capital across asset classes”.

Murray Roos, head of capital markets at LSEG, earlier told the Financial Times that the London-based exchange had been examining the potential for a blockchain-powered trading venue for around a year and had reached an “inflection point”.

Blockchain, best known as the technology underpinning cryptocurrencies such as bitcoin and other crypto assets, is a digital ledger which records and verifies transactions.

LSEG’s move comes as a number of mainstream financial institutions are talking about the potential for blockchain to streamline the process of issuing and trading financial assets.

“LSEG is exploring plans to build an end-to-end digital market ecosystem that will allow for the raising and transfer of capital in a more seamless, cost efficient way across asset classes,” the company told Reuters in an email.

Roos earlier told the FT in an interview that LSEG is definitely not building anything around cryptoassets, but is instead looking to use the technology to improve the efficiency of buying, selling and holding traditional assets.

“The idea is to use digital technology to make a process that is slicker, smoother, cheaper and more transparent . . . and to have it regulated,” he was quoted as saying by the newspaper.

LSEG is considering a separate legal entity for the digital markets business, the FT said, adding that it hoped to have this running within a year, subject to regulatory approvals.

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

Thomson Reuters, parent of Reuters News, holds a minority stake in LSEG, which pays Reuters for news.

(This story has been refiled to remove hyperlink in paragraph 4)

(Reporting by Akanksha Khushi in Bengaluru; Additonal reporting by Radhika Anilkumar; Editing by Savio D’Souza, Rashmi Aich and Alexander Smith)