London Stock Exchange Group said Thursday it will build a new on-chain settlement system for institutional investors.
The service will be called the LSEG Digital Securities Depository. It will connect traditional securities markets with blockchain networks. The goal is simple. Large institutions will be able to trade and settle tokenized bonds, equities, and private market assets using blockchain technology while staying linked to existing infrastructure.
The system will work across several blockchain networks. It will stay compatible with current settlement platforms already used by banks and asset managers.
LSEG said the first deliverable is planned for 2026, but it needs regulatory approval first. The company already operates a blockchain platform for private funds powered by Microsoft Azure. This new build expands that digital push.
Elliott increases pressure as banks back the digital plan
The announcement comes while LSEG faces pressure from activist hedge fund Elliott Management. Elliott has built a significant stake in the company. The fund is run by billionaire Paul Singer.
Elliott manages about 76 billion dollars in assets. The firm has been engaging with LSEG and its chief executive, David Schwimmer, to push for better financial performance.
Shares in LSEG have fallen by more than 35 percent over the past year. The stock was also hit during a broad selloff in global data and software companies tied to fears that new AI tools could hurt existing business models. On Thursday, the shares rose 0.9 percent. The company is also dealing with a weak listings market in the United Kingdom.
Elliott has encouraged LSEG to consider launching a multibillion-pound share buyback once a 1 billion pound tranche is completed. The hedge fund also wants the company to close the margin gap with rivals. LSEG trades at a lower valuation multiple than competitors such as Moody’s and CME Group.
In a statement on Wednesday, LSEG said, “LSEG maintains an active and open dialogue with our investors, while remaining focused on executing our strategy.”
Although many still see it mainly as a stock exchange operator, LSEG changed its structure after acquiring Refinitiv for 22 billion pounds in 2019. That deal turned it into a financial data and analytics company. LSEG also owns roughly a 10 billion pound stake in electronic trading platform Tradeweb.
The company said it will form a strategic partner group to gather feedback from market participants during the development of the depository. The aim is to build an ecosystem where institutions can transact between digital and traditional markets across time zones using different payment methods.
Support for the plan has come from major British banks and financial groups. Barclays, Lloyds, NatWest Markets, Standard Chartered, and Brookfield have welcomed the decision by LSEG.
The new depository places LSEG deeper into blockchain-based settlement. It links tokenized assets with established financial plumbing.
The first phase is expected in 2026 if regulators approve it. For now, LSEG is building the framework while managing investor pressure and market volatility at the same time.
Source: https://www.cryptopolitan.com/lseg-plans-on%E2%80%91chain-settlement-service/
