London Stock Exchange Revolutionizes Trading with Microsoft Blockchain Platform

TLDR

• London Stock Exchange Group completed its first blockchain-powered fundraising transaction using its new Digital Markets Infrastructure platform
• The platform was built with Microsoft and runs on Azure, supporting full lifecycle of digital assets from issuance to settlement
• MembersCap raised money for its private fund using the system, with Archax serving as nominee for the Cardano Foundation
• LSEG becomes the first major global stock exchange to launch a complete blockchain-powered system for trading and settlement
• The technology aims to make private market transactions faster and cheaper, reducing settlement times from 40-50 days to seconds

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The London Stock Exchange Group has completed its first transaction using blockchain technology. The exchange used its new Digital Markets Infrastructure platform for the deal.

LSEG announced the transaction on Monday. The system was used by reinsurance asset manager MembersCap to raise money for its latest private fund.

The platform was built with Microsoft and runs on Microsoft Azure. Microsoft took a 4% stake in LSEG in 2022 as part of their partnership.

LSEG becomes the first major global stock exchange to launch a complete blockchain-powered system. Other exchanges have only facilitated parts of the process, not the full cycle from issuance to settlement.

The Digital Markets Infrastructure platform supports the full lifecycle of digital assets. This includes issuance, tokenization, trading, and post-trade settlement.

How the System Works

The blockchain technology allows assets to be “tokenized.” This creates digital tokens that represent ownership and track transaction history.

Current private market processes can take 40-50 days for settlement. The new system aims to complete transactions in seconds instead of days.

The system provides interoperability between blockchain technology and traditional financial systems. This allows both digital and traditional assets to work together.

Private funds are the first asset class to go live on the platform. LSEG plans to expand to other asset classes over time.

First Clients and Transactions

MembersCap was the first client to use the new platform. The firm conducted the debut transaction for its private fund raising.

London-based Archax also participated as the first client. Archax is regulated by the Financial Conduct Authority and operates as a crypto exchange.

Archax acted as nominee for the Cardano Foundation in the transaction. The Cardano Foundation is a blockchain organization.

The platform makes private funds discoverable through LSEG’s Workspace system. Workspace competes with Bloomberg terminals for financial data.

Fund managers can now interact with professional investors through these platforms. This creates access to a larger pool of potential investors.

Bill Borden is corporate vice president of worldwide financial services at Microsoft. He called the collaboration a “powerful example” of their strategic partnership.

The platform aims to provide more investor access to private market opportunities. These investments were previously difficult to discover and participate in.

LSEG designed the system to improve investor access to capital markets and enhance liquidity. The exchange wants to work with stakeholders to enhance efficiencies for both digital and traditional assets.

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