The London Stock Exchange Group (LSEG) has launched a blockchain-based infrastructure platform for private funds, becoming the first major global stock exchange to adopt such a system.
The new platform, called Digital Markets Infrastructure (DMI), was developed with Microsoft and runs on Microsoft Azure. It supports the full lifecycle of digital assets, from issuance and tokenisation to post-trade settlement.
Bridging Traditional Finance and Blockchain
According to LSEG, the platform is designed to connect distributed ledger technology (DLT) with traditional financial systems. This aligns with the group’s goal of supporting clients across the “full funding continuum.”
Private funds are the first asset class to go live on DMI, with more asset types expected in the future. As part of the rollout, funds on the platform will be discoverable by LSEG Workspace users, allowing general partners to connect with professional investors directly.
Capital management firm MembersCap and Archax, a London-based, FCA-regulated crypto exchange, are the first clients to join the platform. MembersCap conducted DMI’s debut transaction, with Archax acting as a nominee for the Cardano Foundation.
Microsoft’s Role in Development
Bill Borden, corporate vice president of worldwide financial services at Microsoft, called the project a strong example of innovation through 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 Liquidity
Darko Hajdukovic, head of digital markets infrastructure at LSEG, said today’s private market processes are ready for innovation. The exchange aims to improve investor access to capital markets and enhance liquidity.
“We intend to do this by continually working with all stakeholders to enhance efficiencies and connectivity for both digitally-native and traditional assets,” he added, noting strong demand for regulated, end-to-end financial markets infrastructure based on blockchain.
Broader Market Shift Towards Blockchain
The move comes as traditional finance players show growing interest in blockchain. At the RWA Summit in Cannes earlier this year, JPMorgan’s Nelli Zaltsman highlighted that blockchain initiatives from established institutions could speed up the convergence of traditional finance and decentralised finance (DeFi).
Zaltsman said JPMorgan’s aim has always been to find the best way to integrate public blockchains, within regulatory limits. In June, the bank piloted synchronised settlement technology with Chainlink, enabling blockchain-based deposits to coordinate transactions across multiple networks.
A New Era for Private Market Investments
Ultimately, LSEG’s new platform seeks to open more opportunities for investors by making private markets easier to access and participate in. If successful, it could pave the way for further integration of blockchain technology into global financial markets.
