London Stock Exchange embraces blockchain: steps forward in exchange innovation

Important exchange news: The London StockExchange is developing a traditional trading platform based on blockchain technology

Specifically, a member of the LSE’s executive team is currently exploring the possibilities of blockchain to enhance the traditional asset trading system.

See below for more details. 

A possible new era for exchanges: the potential of blockchain being explored in London 

According to recent news, the London Stock Exchange (LSE) group is planning to create a blockchain-based platform designed to host traditional financial assets.

A report published by the Financial Times reveals that the company has been exploring the potential of a blockchain-based exchange for about a year. 

Murray Roos, head of capital markets at the LSE Group, explained that the company has reached a point where it is ready to move forward with the project.

Importantly, according to Roos, the focus will not be on cryptocurrencies, but rather on using blockchain technology to optimise the holding, buying and selling of traditional assets. 

The stated aim is to use this digital technology to make the process of trading traditional assets ‘smoother, more efficient, cheaper and more transparent’.

Furthermore, Roos assured that this system will be subject to regulation.

Roos also stressed that the LSE Group has been patiently waiting for investors to be ready and for public blockchain technology to be sufficiently mature before launching the project. 

If successful, the LSE Group would be the first major global exchange to offer investors a complete ecosystem based on blockchain technology.

SWIFT and Lufthansa Airlines embrace blockchain technology 

At the same time, other traditional financial institutions are showing increasing interest in incorporating blockchain technology. 

On 31 August, for example, SWIFT, the banking messaging network, published a report exploring how blockchain connections can be established to enable interoperability between different blockchain networks.

On the same day, Lufthansa Airlines launched a loyalty programme based on non-fungible tokens (NFTs) on the Polygon network. 

NFT holders will be able to receive rewards such as lounge access and flight updates.

In the specific case of SWIFT, the report titled “Unifying Blockchains: Overcoming Fragmentation in Tokenised Assets”, the platform concluded that for near-term market development, a more gradual approach of connecting existing systems to blockchains is “more realistic” than unifying central bank digital currencies (CBDCs), deposits and tokenised assets into a single, concentrated ledger.

In the report, SWIFT highlights a ‘gap in reliable interoperability’ between the various blockchain networks, which the financial giant says leads to inefficiencies and a less than satisfactory user experience. 

However, SWIFT claims to have the potential to address this issue.

Working with several financial institutions and blockchain solution provider Chainlink, SWIFT has demonstrated that it can provide a single point of access to multiple networks using existing infrastructure. 

According to SWIFT, this solution significantly reduces the operational challenges and costs associated with supporting tokenised resources for institutions.

UK’s NCA hires cryptocrime specialists 

Recently, the UK’s National Crime Agency (NCA) is looking to bolster its digital asset investigation team with the recruitment of four senior investigators to its Complex Financial Crime Team, who will focus on investigating crimes related to cryptocurrencies.

These new team members will be tasked with investigating high-level cryptocurrency-related fraud, money laundering and other crimes based on blockchain technology, which are often perpetrated by organised crime groups. 

You will also work closely with a surveillance team and the London Metropolitan Police.

The role requires close liaison with other investigators, intelligence and analysis team members to develop complex cases using data and evidence from a variety of sources.

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