LSEG eyes blockchain for its CSD

The LSE's globeSettle will become Europe's first CSD to implement blockchain technology.

The London Stock Exchange Group is looking at implementing blockchain technology into its central securities depository (CSD) globeSettle.

LSEG CEO Xavier Rolet spoke of the group’s blockchain intentions on the exchange’s Q4 investor call.

“The blockchain technology is well known,” said Rolet. “It’s how you un-bed blockchain at the regulatory layer and from a regulatory standpoint settlement and custody operation is the most important layer. This is why we’re working to implement blockchain in initiatives like globeSettle,” Rolet added.

The news represents the latest development for blockchain technology that has achieved considerable publicity in recent months.

In February Nasdaq’s blockchain technology was incorporated into Estonia’s e-Residency platform allowing a blockchain based e-voting service for users of companies listed on Nasdaq’s Talin Stock exchange.

Additionally, the Australian Securities Exchange is reportedly exploring how to implement a new clearing and settlement system based on blockchain technology.

Rolet also believes that blockchain technology has potential for wider implementation but faces difficulties.

“If you can reconcile the inherent vulnerability of a blockchain-type cryptocurrency design to things like fraud, money laundering, and other challenging type of activities, and get the regulators to support them, it can be a powerful concept.”

“So our view is blockchain, yes, but it will take some time before it comes to play. It will probably be started initially in commoditised products.”