LONDON: The London Stock Exchange Group PLC (LSEG) is working on a new trading platform that will use blockchain technology to trade traditional financial assets, such as equities. This was reported by the Financial Times on Monday.
According to the report, LSEG’s capital markets and data-technology division has been researching the potential of a blockchain-powered trading platform for a year.
According to FT, Murray Roos, the head of this division, said that blockchain technology has reached a point where it can enable their plans. He also said that Julia Hoggett, the head of the London Stock Exchange, is expected to lead the project.
Roos explained that the aim is to use digital technology to make trading more efficient, cost-effective, transparent, and regulated. He said that LSEG is considering creating a separate legal entity to launch the project next year, subject to regulatory approval.
He added that they are in talks with various regulators and the UK government. He envisioned a global platform that would allow cross-border trading, complying with the rules and regulations of different jurisdictions. He said that this was not possible in an analogue world.
“Our ultimate goal is a global platform that allows participants in all jurisdictions 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.
Blockchain technology is a system that records transactions on a distributed ledger without a central authority. It is best known for powering cryptocurrencies like bitcoin and ether. However, blockchain technology has been around since the 80s.
Bitcoin was the first successful application of blockchain technology, allowing people to exchange value without intermediaries or trusted parties. However, public blockchains like bitcoin are pseudonymous, meaning users’ identity is hidden. This has led to many cases of fraud and scams in the cryptocurrency markets.
Private blockchains, on the other hand, can be restricted to authorised and verified customers. This is likely the type of blockchain that LSEG is developing for its trading platform.