LSEG to Unite Traditional and Digital Markets With On-Chain Settlement

LSEG plans to build an on-chain settlement capability for institutional market participants.

The global provider of financial markets infrastructure and data said in a Thursday (Feb. 12) press release that this solution, the LSEG Digital Securities Depository (DSD), is part of the company’s initiative to tokenize most bonds issued and available on exchanges, as well as most securities.

The LSEG DSD will connect traditional and digital markets and support seamless interaction between existing settlement platforms and emerging digital infrastructures, according to the release.

Its capabilities will drive greater efficiencies in collateral management and facilitate access to liquidity for fixed income, equities, private markets and other assets, the release said.

LSEG will work with strategic partners to incorporate their feedback into the build and to enable issuance, settlement and trading, per the release.

“We look forward to welcoming new strategic partners as we build LSEG Digital Markets Infrastructure — a seamless ecosystem in which participants can move effortlessly between digital and traditional markets, connected across time zones and choice of payment options,” Daniel Maguire, group head of markets at LSEG, said in the release.

In another recent move in its tokenization initiative, LSEG said in September that it had begun the rollout of its blockchain-powered Digital Markets Infrastructure (DMI) platform, starting with private funds.

The DMI supports the full asset life cycle, including issuance, tokenization, distribution, post-trade asset settlement and servicing, across multiple asset classes. The company plans to expand the platform beyond private funds to add other asset classes.

“At LSEG we are committed to significantly improving access to private markets, by streamlining workflows, enhancing distribution and enabling liquidity,” Darko Hajdukovic, head of digital markets infrastructure at LSEG, said in a September press release. “We intend to do this by continually working with all stakeholders to enhance efficiencies and connectivity for both digitally native and traditional assets.”

In December, LSEG announced a collaboration with OpenAI to bring LSEG’s licensed financial data and analytics directly into ChatGPT. The exchange operator said this collaboration would expand its push to deliver artificial intelligence-ready data across financial markets.