London Stock Exchange launches blockchain platform for private funds

The London Stock Exchange Group (LSEG) has launched a new blockchain platform that must make private funds more accessible to investors.

The platform, built in collaboration with Microsoft, has to build a bridge between the traditional financial world and the possibilities of digital markets. The question is whether this is the start of a broader movement in which traditional stock markets are increasingly shifting towards crypto and Defi.

Private funds become more accessible for investors

The Platform is called Digital Markets Infrastructure (DMI) and supports the entire life cycle of investments, from issue and digitization to the settlement of transactions. According to LSEG, the platform runs on Microsoft Azure and it is designed to collaborate with existing financial systems. This means that the stock market wants to be the first to support customers worldwide in all steps of capital provision.

The first products that become available through the system are private funds. These are investment funds that are normally only accessible to a small group of large investors and are therefore difficult for others. Via DMI, these funds can be discovered more easily by users of Workspace, a digital platform for investors. In this way, fund managers get new opportunities to get in touch with professional parties.

The first customers are Memberscap, a Capital Management Firm, and Archax, a London-based Crypto-Exchange regulated by the Financial Conduct Authority. Memberscap carried out the first transaction, with Archax acting as a intermediate party for the Cardano Foundation

Microsoft sees rapid change in the financial sector.

According to Bill signs from Microsoft, the collaboration shows how quickly the financial sector is changing. “Together we shape the future of Global Finance and we create new opportunities for customers,” he said.

Expectations are also high at LSEG. Darko Hajdukovic, head of Digital Markets Infrastructure, says that there is a lot of demand for a regulated system that can connect both traditional investments and digital assets. “We want to give investors better access to capital markets and create more liquidity.”

The interest of major financial players in blockchain technology is increasing rapidly. For example, JPMorgan previously tested a system with Chainlink (link) to wrap transactions over different block chains at the same time. According to Nelli Zaltsman from JPMorgan, the fusion of traditional and decentralized finance can expect faster than many people.