The London Stock Exchange Group has successfully executed its inaugural blockchain-based fundraising, allowing MembersCap to secure capital for a private fund via a comprehensive digital markets framework.
Summary
- The transaction encompassed issuance, trading, and settlement all on a single platform.
- LSEG’s blockchain system is designed to reduce settlement times from 40–50 days to almost instantaneous, enhancing transparency.
- Increasingly, banks, exchanges, and asset managers are looking into blockchain and tokenization to modernize capital markets.
The London Stock Exchange Group has initiated its first blockchain-based transaction, representing a significant advancement in the application of distributed ledger technology within traditional finance, as reported by the Financial Times on Monday. The transaction involved MembersCap, a reinsurance asset management firm, which utilized LSEG’s newly developed digital markets platform to raise funds for its newest private offering.
This transaction is particularly significant as it was entirely carried out on LSEG’s blockchain platform, encompassing the full fundraising process—from issuance to trading and settlement. This comprehensive functionality differentiates it from other blockchain endeavors in financial markets, which typically focus on just one aspect of the transaction pipeline.
“In private markets, the current process is highly manual, expensive, and can take up to 40–50 days for settlement. We are establishing infrastructure suited for the 21st century,” stated Darko Hajdukovic, head of digital markets infrastructure at LSEG.
The system was created in partnership with Microsoft, which holds a 4% equity interest in LSEG.
London Stock Exchange Group pioneers as blockchain adoption accelerates in traditional finance
While this marks the first end-to-end blockchain-powered capital raise by a major global exchange, the embrace of blockchain by traditional financial entities has been rapidly increasing. Banks, exchanges, and asset managers are progressively investigating distributed ledger technology to enhance settlement speeds, lower costs, and boost transparency in financial markets.
Larry Fink, CEO of BlackRock, recently emphasized the technology’s promise for traditional finance, stating: “Tokenization will transform investing. Markets won’t need to close. Transactions that currently take days could finalize in seconds.”
