London Stock Exchange Launches Blockchain Platform for Private Funds

By Adedapo Adesanya

The London Stock Exchange Group (LSEG) has launched a blockchain-based infrastructure platform for private funds, making it the first major global stock exchange to use such a system.

The platform, called Digital Markets Infrastructure (DMI), supports the full lifecycle of digital assets, from issuance and tokenization to post-trade settlement.

According to a statement on Monday, it was developed with Microsoft and runs on Microsoft Azure.

The exchange said the system was designed to provide interoperability between distributed ledger technology and traditional financial systems as part of its goal to become the first global exchange group to support clients across the “full funding continuum.”

Private funds are the first asset class to go live on the DMI, with plans for additional asset classes.

As part of the initial offering, private funds on the DMI will be discoverable by Workspace’s users, enabling general partners to interact with professional investors on these platforms.

Capital management firm MembersCap and London-based Archax, a Financial Conduct Authority-regulated crypto exchange, were the first clients onboarded. MembersCap conducted the platform’s debut transaction with Archax acting as a nominee for the Cardano Foundation.

EJF Capital has also been onboarded as an early adopter and a selection of their funds will be available on the platform soon.

Speaking on this, Mr Darko Hajdukovic, Head of Digital Markets Infrastructure, LSEG, said: “There are many processes in private markets today that can be improved. At LSEG we are committed to significantly improving access to private markets, by streamlining workflows, enhancing distribution, and enabling liquidity.

“We intend to do this by continually working with all stakeholders to enhance efficiencies and connectivity for both digitally-native and traditional assets. The onboarding of our first clients and this first transaction are significant milestones, demonstrating the appetite for an end-to-end, interoperable, regulated financial markets DLT infrastructure. LSEG’s position as a convener of markets can bring significant scale to digital assets and effect real change.”

Adding his input, Mr Bill Borden, Corporate Vice President, Worldwide Financial Services, Microsoft, said: “Microsoft’s collaboration with LSEG on its Digital Markets Infrastructure (DMI) is a powerful example of the innovation driving our strategic partnership. Together, we’re reshaping the future of global finance to empower our customers to unlock new opportunities and drive meaningful change.”