The London Stock Exchange (LSEG) is reportedly working on a new digital marketplace that will leverage blockchain technology.
Murray Roos, head of capital markets at the LSE Group, told the FT that the company had made the decision to move forward with the initiative after 12-months of internal discussions on the feasibility of a blockchain/DLT-enabled trading solution.
The UK exchange is considering the launch of another entity for the new initiative and is currently holding discussions with the UK government as well as regulators.
Ross has emphasized that the initiative will not involve virtual currencies and only leverages the blockchain tech that underpins the digital assets in order to make purchasing, selling and holding of traditional assets more seamless.
Roos explained:
“The idea is to use digital technology to make a process that is slicker, smoother, cheaper and more transparent . . . and to have it regulated,”
Governments and business organizations across the globe have been focused on implementing blockchain-enabled systems in order to streamline operations. However, the decision to utilize a blockchain/DLT framework is probably a decision that should primarily be made after consulting with the technical team. Even though the development of blockchains has become a lot more streamlined in the past few years, it’s still simply a data structure that may or may not be well-suited for a particular use-case.
It’s also worth noting that not all blockchain-focused initiatives have succeeded.
As widely reported last year, the highly-anticipated plans by the Australian Securities Exchange (ASX) to harness the benefits of blockchain tech to bring its clearing and settlements system into the digital age were canceled in 2022.
As revealed in a November 17 statement, ASX confirmed that it had suspended relevant activities of its “CHESS replacement project” after an extensive review from tech consulting company Accenture, which pointed towards considerable challenges with the solution design and its ability to address ASX’s requirements.
Among the main findings in its report, Accenture stated that the business workflows were “not tailored for a distributed environment” and that the DLT-powered system had been quite complex, and the completion timeframe was undetermined regardless of the application software being complete for the most part.
