LSE Group Launches Blockchain Platform for Private Funds

The London Stock Exchange Group (LSEG) has unveiled a new blockchain platform for private funds. This platform allows assets to be turned into digital tokens, making them easier to manage and trade. This shows how traditional finance is no longer just testing blockchain but now using it as part of its main system.

MembersCap Becomes First to Use LSEG’s Blockchain Platform

At the heart of the project is Digital Markets Infrastructure (DMI), a system developed on Microsoft Azure. Unlike many blockchain ventures that sit outside existing frameworks, DMI is designed to stay firmly within today’s financial rules. As announced, the system is designed to allow private-market issuers to create, manage, and service tokenized instruments in a safe and regulated environment.

The first real-world use of DMI came from MembersCap, a Bermuda-based investment manager. MembersCap used the platform to raise capital for its tokenized MCM Fund 1. To ensure smooth operation, Archax, a London-regulated digital exchange, acted as the nominee.

While this marks only the first phase, LSEG has signaled its ambition to extend the system to other asset classes in the near future. The goal is not just to test blockchain in finance but to make it an everyday tool for global markets.

Tokenized Assets Gain Ground Among Global Giants

Tokenization simply means representing traditional assets, such as funds, bonds, or shares, as digital tokens on a blockchain. 

Tokenized assets can be used for faster settlement, lower fees, and easier access to markets around the clock. Advocates also argue that tokenization creates new opportunities for liquidity. It may one day represent trillions of dollars in traditional finance (TradFi) markets.

This trend is no longer confined to startups. Global giants like BlackRock, Franklin Templeton, Robinhood, and not limited to Kraken are already running tokenized money market funds around the globe. These big firms managed billions of dollars through blockchain networks such as Ethereum.

Analysts See $30 Trillion Future for Tokenized Assets

The launch of DMI comes at a time when other major exchanges are making their own moves. Nasdaq has filed with U.S. regulators for permission to let tokenized securities trade alongside traditional stocks on the same platform. If approved, this would be a landmark step that could reshape trading by 2026.

Not everyone thinks tokenization is ready to grow at a large scale, even with the recent market surge. Banks such as JPMorgan say adoption has been slower than many people expected. The bank also note that using real-world assets on blockchain is still in its early stage, even though it gets a lot of attention.

Still, the future of tokenized finance looks strong. Analysts at Standard Chartered predict that tokenized real-world assets could reach $30 trillion by 2034. Today, more than $13 billion is already locked in tokenized products across different blockchain platforms.