London Stock Exchange Group (LSEG) has taken a significant step forward in technology by launching its Digital Markets Infrastructure (DMI) platform for private funds. In other words, the exchange team has debuted blockchain-based infrastructure and raised funds to handle various assets using the distributed ledger technology.
First blockchain-powered fundraising for private investments
The first thing that moved on the DMI blockchain platform is private funds. The team facilitated the transaction of private investment funds (hedge funds, equity funds, or venture funds) on the blockchain.
The smart move of the London Stock Exchange
LSEG’s blockchain initiative — DMI — was built with the support of Microsoft Azure, Microsoft’s cloud computing platform, providing computing, networking, storage, AI services to operate applications.
An official statement highlighted that DMI will provide blockchain-powered services to handle financial assets at every stage of their life. From asset creation, tokenization, and distribution to post-trading activities, the DMI will deploy blockchain technology to deliver single, secure, and efficient operations.
Multiple assets such as stocks, bonds, and other securities also work on the DMI, aiming for speed, transparency, and reduced costs.
Issuance on blockchain– private funds are digitally created and recorded on the blockchain.
Tokenization of funds– The shares of funds are converted into digital tokens, where each token represents an investor’s share.
Fund distribution to investors– The tokenized funds can be securely distributed to qualified investors.
Post-trade services– Blockchain helps to track investor activities after a trade, and all the records are automatically handled on the ledger.
LSEG’s smart blockchain is interoperable
Deploying blockchain technology doesn’t mean the London Stock Exchange is permanently moving to the blockchain. The DMI platform is interoperable with existing blockchain systems and traditional financial systems like banks, brokers, and exchanges.
The interoperability ensures that institutions and investors do not have to leave behind what they already use; DMI can plug into both worlds.
Bigger strategy turns into reality with blockchain infusion
LSEG has a firm goal to become the first global exchange group to support customers through the entire funding journey. And, the launch of Digital Markets Infrastructure is a key part of its bigger strategy to transform how the capital market functions.
LSEG’s long-term strategy already covers initiatives like the Private Securities Market, a platform for trading private company shares. And, the new blockchain infrastructure started operating with private funds as its first application.
DMI’s Workspace makes data visible
Workspace, the data and analytics tool of LSEG, will display all the blockchain-based private fund data. This allows general partners to showcase their funds to investors. Meanwhile, investors can now easily find and access private funds on Worksapce. Traditionally, private funds are difficult to access and evaluate as they are not listed on public exchanges.
LSEG’s blockchain initiative marks a bold move in transforming the future of finance into the digital world. Recently, the US Commerce Department announced its plans to shift GDP data onto blockchain, aiming to ensure transparency, security, and easy access for everyone.
