London Stock Exchange Launches Blockchain-Based Private Fund Market

The London Stock Exchange Group (LSEG) has introduced a blockchain-powered platform for private funds, marking a significant step in institutional adoption of distributed ledger technology. Developed in partnership with Microsoft, the system streamlines issuance, subscriptions, and post-trade servicing into a single infrastructure. The first transaction involved reinsurance asset manager MembersCap, with plans to expand to additional asset classes.

This initiative aligns with broader UK regulatory efforts to modernize private markets. The Financial Conduct Authority recently established PISCES, a framework for intermittent trading of private company shares, while HM Treasury eliminated stamp duties on such transactions. LSEG emphasizes the platform's role as market infrastructure rather than a cryptocurrency product, leveraging Microsoft's cloud capabilities.

Private markets represent a £1.2 trillion opportunity in the UK alone, according to FCA estimates. The blockchain solution addresses persistent friction points in traditional fund management - slow issuance cycles and fragmented post-trade processes. While distinct from crypto assets, the deployment demonstrates growing institutional confidence in blockchain's capacity to transform capital markets.