The London Stock Exchange Group (LSEG) has launched a new blockchain-based platform for private funds, becoming the first major global exchange to use distributed ledger technology in this way.
New Digital Markets Infrastructure
The system, known as Digital Markets Infrastructure (DMI), was developed with Microsoft and is hosted on the company’s Azure cloud platform. LSEG says it is designed to handle the entire lifecycle of digital assets, from initial issuance and tokenisation to post-trade settlement.
The group says its ambition is to connect blockchain with traditional financial systems and offer clients support across the “full funding continuum” — from private markets through to public trading.
Private funds are the first asset class to go live on the platform, though more are expected to follow.
Early Clients and First Transaction
As part of the initial rollout, private funds listed on DMI will also be visible to professional investors using LSEG Workspace, creating a new channel for managers and potential backers to connect.
The first clients to sign up were MembersCap, a capital management firm, and Archax, a London-based crypto exchange regulated by the Financial Conduct Authority. MembersCap completed the debut transaction on the platform, with Archax acting as nominee for the Cardano Foundation.
Backed by Microsoft
LSEG’s partnership with Microsoft is a central part of the project. Bill Borden, corporate vice president for worldwide financial services at Microsoft, described the new platform as “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,” he said.
Improving Access and Efficiency
LSEG says the aim of DMI is to make private markets more efficient and accessible. Private investments have traditionally been difficult for many investors to discover or take part in, and settlement processes are often fragmented.
Darko Hajdukovic, head of digital markets infrastructure at LSEG, said there was strong demand for a regulated system that could bring both traditional and digital assets together.
“We intend to do this by continually working with all stakeholders to enhance efficiencies and connectivity,” he said.
Industry Moving Towards Blockchain
The launch comes as traditional finance houses increasingly experiment with blockchain-based systems.
Nelli Zaltsman, head of blockchain payments innovation at JPMorgan’s Kinexys, said at a recent industry event in Cannes that platforms like LSEG’s could speed up the merging of traditional finance and decentralised finance (DeFi).
“Our goal has always been to find the best way to work with the public blockchain, subject to regulation,” she said.
Earlier this year, JPMorgan trialled a system using Chainlink technology to synchronise settlement across different blockchains, pointing to growing momentum in this area.
Outlook
LSEG’s move signals how quickly blockchain is moving from the margins of finance into its mainstream. By offering a regulated platform for tokenised assets, the exchange hopes to give investors more access to private markets while also setting a precedent for how global exchanges may operate in the digital era.
