LSEG Launches Digital Public Infrastructure for Private Funds
The London Stock Exchange Group (LSEG) has become the first major global stock exchange to launch a blockchain system for private funds, according to an official statement.
The platform, called Digital Markets Infrastructure (DMI), supports the full lifecycle of digital assets, from issuance and tokenization to post-trade settlement.
DMI was built by Microsoft on Microsoft Azure to connect traditional financial systems with distributed ledger technology (DLT), making life easier for investors and fund managers.
Private Funds Lead the Blockchain Adoption
Private funds are the first asset class introduced on the DMI platform. More asset classes are expected to launch in due course.
Workspace users can now discover private funds through DMI, allowing GPs (General Partners) direct engagement with professional investors.
The first onboarding included capital management firm MembersCap, and Archax, a London FCA-regulated crypto exchange. MembersCap conducted the initial transaction for the platform, with Archax acting as nominee for the Cardano Foundation.
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Microsoft and LSEG Drive Financial Innovation
Microsoft called the cooperation a model of strategic innovation.
“Combined we are redefining the future of global finance to help our customers unlock new possibilities and make impact,” says Bill Borden, corporate vice president of worldwide financial services at Microsoft.
Darko Hajdukovic, who leads infrastructure for digital markets at the London Stock Exchange Group, stated that it is essential to enable better access for investors and improved liquidity for private markets.
“Our objective is to create efficiencies and improved connectivity for digital-native assets and traditional assets. There is a strong craving for regulated infrastructure in the financial system, end-to-end and interoperable, based on DLT.”
Bridging Traditional Finance and DeFi
The DMI platform is set to make private investment opportunities easier to find than before. JPMorgan believes incorporating blockchain-based incentives will accelerate the merger of traditional finance with decentralized finance (DeFi).
Nelli Zaltsman, head of blockchain payments innovation at JPMorgan’s Kinexys, noted:
“As per regulatory environment, we’ve always aimed to collaborate with the public blockchain to keep looking for opportunities.”
Earlier this year, JPMorgan trialed a system for synchronized settlement using Chainlink to ensure that deposits on one blockchain could be used for transactions on other blockchains.
