London Stock Exchange Group (LSEG) has announced plans to build an on-chain settlement capability, to be known as the LSEG digital securities depository (DSD).
Daniel Maguire
The proposed DSD will serve as a market infrastructure solution for institutional participants. It is intended to support interoperability between traditional and digital markets, connecting existing settlement systems with emerging digital infrastructures.
According to LSEG, the platform will support multiple blockchain networks and allow interaction between conventional post-trade processes and tokenised environments.
The first phase of delivery is targeted for 2026, subject to regulatory approval.
Daniel Maguire, group head of markets, LSEG: “We look forward to welcoming new strategic partners as we build LSEG Digital Market Infrastructure – a seamless ecosystem in which participants can move effortlessly between digital and traditional markets, connected across time zones and choice of payment options.”
The development builds on LSEG’s existing distributed ledger-based digital markets infrastructure (DMI), powered by Microsoft Azure. The DMI platform has been used to facilitate the tokenisation and distribution of private funds.
The new DSD capability is expected to support on-chain settlement across a broader range of asset classes, including fixed income, equities and private markets. LSEG said the initiative is intended to enhance collateral management processes and improve access to liquidity.
Ryan Hayward, Head of Digital Assets, Barclays, said: “LSEG’s Digital Securities Depository is a positive step in the development and adoption of digital assets across UK markets. Barclays will continue to work with the UK government, LSEG and other providers on exploring a range of digital assets, as well as developing our own use cases.”
The group has previously indicated that tokenisation could play a significant role in the future of capital markets, particularly in the issuance and trading of bonds. The DSD forms part of that broader strategy to integrate digital asset infrastructure with established exchange and post-trade environments.
As part of the design and implementation process, LSEG plans to establish a strategic partner group. The objective is to incorporate market feedback into the build and to support issuance, settlement and trading across both digitally native securities and digital representations of traditional instruments.
Angus Fletcher, global head of digital solutions, State Street, said: “As tokenisation continues to mature, interoperability between traditional and digital market infrastructure will be critical.”
Fletcher added: “We are pleased to engage with LSEG as it develops the Digital Securities Depository, and we look forward to collaborating to assess models that support institutional adoption while meeting the operational and regulatory expectations of our clients.”
Participants in the programme are expected to be announced in due course.