London Stock Exchange Group (LSEG) said Wednesday it will develop an onchain settlement capability for digital securities, joining a growing number of traditional financial infrastructure providers building blockchain-based systems for institutional markets.
The LSEG Digital Securities Depository will connect traditional and digital markets while supporting multiple blockchain networks, the company said. The system is designed to enable interaction between existing settlement platforms and emerging digital infrastructure, with the first phase planned for 2026 subject to regulatory approval.
The depository will focus on collateral management and liquidity access for fixed income securities, equities and private market assets, according to the announcement. LSEG said it is building toward a future where most bonds and eventually most securities are tokenized.
"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 a statement .
LSEG operates an existing distributed ledger technology-based platform powered by Microsoft Azure that has enabled tokenization and distribution of private funds. The new depository represents an expansion of those capabilities into broader securities settlement.
The company said it will form a strategic partner group to incorporate market feedback during development and enable issuance, settlement and trading of both digitally native securities and digital representations of traditional instruments. LSEG did not specify which firms would participate but said participants would be announced later.
Several major UK banks indicated support for the initiative. Barclays, Lloyds, NatWest Markets, Standard Chartered and State Street issued statements welcoming the project.
The announcement positions LSEG to compete with other exchanges and infrastructure providers developing blockchain-based settlement systems. Several jurisdictions including Singapore and Switzerland have launched or are developing digital securities platforms as traditional financial institutions explore tokenization of conventional assets.
LSEG did not provide details on the regulatory approvals required for the Digital Securities Depository or specify which regulators would oversee the system. The company also did not disclose investment amounts or technical specifications for the platform.
