Cryptocurrency
Blockchain
LSE sees possible applications of blockchain in UK stock market
The London Stock Exchange (LSE) appears keen on exploring how blockchain technology can help its core businesses.
In a recent interview with CNBC, LSE’s chief executive officer Nikhil Rathi talked about how the technology could be used in the UK’s stock market.
“You can certainly see distributed ledger technology having an application in the issuance process,” Rathi told the news outlet. “I can see that technology being used in settlement too.”
As noted by CNBC, the London-based exchange operator recently acquired a minority stake in Nivaura, a company that claims to have issued the world’s first automated cryptocurrency-denominated bond. LSE has been testing the issuance, admission and trading of equities with Nivaura in a regulatory sandbox.
Rathi noted that rival exchange operators had come up with interesting ideas on how to make use of blockchain technology and added that it remained to be seen which ones would gain market traction.
Early mover
One such company is the Swiss stock exchange SIX, which plans to launch a blockchain-powered platform. The platform, which is called SIX Digital Exchange (SDX), aims to utilise blockchain technology to speed up trading and is expected to launch in the second half of this year.
“The supervisory board will probably decide (on the project) in late summer,” SIX’s chairman Romeo Lacher told Reuters in February. He also said at the time that the company wanted to showcase the new platform by using it to raise capital via Security Token Offering (STO) – a fundraising mechanism that resembles initial coin offering, but which , unlike ICO, offers a stake in the company. SIX wants to then gradually expand the scope of the platform to offer other assets, including stocks, bonds and possibly exchange-traded funds. The company also believes that the upcoming platform could allow it to offer trading in non-security assets such as paintings or vintage cars.
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