A London Stock Exchange group has drawn up plans for a new digital markets business to offer large-scale trading of traditional financial assets on the blockchain technology known to power cryptocurrencies, the Financial Times reports.
The firm had been studying the potential of a blockchain-powered trading venue for about a year and had reached a “tipping point” when it decided to go ahead with the plans, Murray Roos, head of capital markets at LSE Group, told the FT in an interview. .
Blockchain is a digital ledger that records and verifies transactions.
The LSE is not building anything around cryptocurrencies, but wants to use the technology that underpins tokens such as bitcoin to improve the efficiency of buying, selling and holding traditional assets, Roos told the FT.
“The idea is to use digital technology to make a process that is smooth, slick, cheaper and more transparent?.?.?.?and to regulate it.”
LSEG is considering using a separate legal entity to operate in digital markets, it said in a report on Monday, adding that it hopes to be up and running within the next year, subject to regulatory approvals.
The company is already in talks with regulators, a number of jurisdictions and the UK government and the Treasury, the report added.
The London Stock Exchange Group did not immediately respond to a Reuters request for comment.
The move comes at a time when many major financial institutions are talking about blockchain’s potential to streamline the process of issuing and trading financial assets.
Thomson Reuters, the parent company of Reuters News, has a minority stake in LSEG, which pays Reuters for news.
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