London Stock Exchange’s blockchain gamble could rewrite the rules of finance
By ljdevon // 2025-09-18
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  • The London Stock Exchange Group (LSEG) has launched Digital Markets Infrastructure (DMI), a blockchain-based platform for private funds, making it the first major global exchange to adopt such a system.
  • Developed in partnership with Microsoft Azure, the platform supports the entire lifecycle of digital assets, from issuance to post-trade settlement, with plans to expand to other asset classes.
  • The move signals a blurring of lines between traditional finance and decentralized systems, raising questions about accessibility, regulatory challenges, and whether blockchain can democratize investing—or just streamline it for the wealthy.
  • Early adopters include MembersCap and Archax, a crypto exchange regulated by the UK’s Financial Conduct Authority, with the first transaction involving the Cardano Foundation.
  • Industry experts, including JPMorgan’s blockchain innovation lead, suggest this could accelerate the merger of traditional and decentralized finance (DeFi), but skepticism remains about whether legacy institutions can truly embrace transparency.

When the unshakable starts to shift: Why this matters more than another tech upgrade

For over three centuries, the London Stock Exchange has been the beating heart of global capitalism—a place where fortunes are made, empires rise, and the rules of money are written in stone. But stone erodes. And in 2024, the cracks were showing. The old system—built on paper trails, middlemen, and a labyrinth of fees—is struggling to keep up with a world that demands speed, transparency, and access. Enter blockchain, the technology that was supposed to burn it all down. Instead, the LSEG is trying to harness the fire. The DMI platform isn’t just a new tool; it’s a bridge between two financial worlds. On one side, you’ve got the traditional players—bankers, fund managers, and institutional investors who’ve long controlled the flow of capital. On the other, you’ve got the decentralized upstarts, the crypto natives who’ve spent the last decade screaming that the system is rigged. Now, the LSEG is saying: What if we didn’t have to choose? What if the efficiency of blockchain could be married to the stability of a 300-year-old exchange? Darko Hajdukovic, the head of digital markets infrastructure at LSEG, puts it bluntly: “Today’s private market processes are ripe for innovation.” That’s an understatement. Private markets—where hedge funds, venture capital, and private equity live—have long been the exclusive playground of the ultra-wealthy. Minimum investments often start in the six or seven figures, locking out everyday investors. The DMI platform, at least in theory, could change that by lowering barriers to entry, making these opportunities visible to a broader pool of investors through LSEG’s Workspace platform. But here’s the catch: Will this actually democratize finance, or just make it easier for the rich to get richer? The LSEG isn’t tearing down the walls of the club—it’s just installing a sleeker door. And while blockchain’s promise has always been decentralization, this is still a centralized exchange calling the shots.

The Microsoft factor: When tech giants bet on the future of money

If the LSEG is the old guard dipping its toes into new waters, Microsoft is the lifeguard—and it’s not just watching from the chair. The DMI runs on Microsoft Azure, the tech giant’s cloud computing platform, which means this isn’t just a financial experiment; it’s a silicon valley-meets-wall street power play. Bill Borden, Microsoft’s corporate vice president of worldwide financial services, frames it as a “strategic partnership” designed to “reshape the future of global finance.” That’s corporate-speak for: We’re betting big that blockchain isn’t just a fad. But Microsoft’s involvement raises questions. The company has spent years courting regulators and governments, positioning itself as the safe, establishment-friendly face of tech. Is this blockchain with training wheels—a way to sanitize decentralization for institutional players? Or is it a genuine attempt to build something new? The early adopters tell part of the story. MembersCap, a capital management firm, conducted the platform’s first transaction, with Archax—a regulated crypto exchange—acting as a nominee for the Cardano Foundation. That’s right: a traditional fund manager, a crypto exchange, and a blockchain nonprofit all in the same transaction. It’s the kind of collaboration that would’ve been unthinkable five years ago. But it also highlights the tension at the heart of this experiment. Archax is FCA-regulated, meaning it plays by the rules of the old system. The Cardano Foundation, meanwhile, is part of a movement that wants to rewrite those rules entirely. Nelli Zaltsman, head of blockchain payments innovation at JPMorgan’s Kinexys, sees this as inevitable. “Our goal has always been to find the best way to work with the public blockchain, regulatory environment permitting,” she said at the RWA Summit Cannes 2025. JPMorgan, of course, is no stranger to blockchain—it’s been quietly building its own systems for years, including a pilot program with Chainlink to synchronize settlements across different blockchains. What Zaltsman is really saying is: We’re not fighting the future; we’re trying to control it.

Can blockchain and Wall Street ever really trust each other?

Here’s the paradox: Blockchain was built to eliminate the need for trust in institutions. It’s a system where code, not people, enforces the rules. But the LSEG is an institution through and through—one with centuries of history, regulatory ties, and a vested interest in maintaining its power. So when the exchange says it’s embracing blockchain, what does that actually mean? For starters, it means interoperability—the ability for blockchain-based assets to play nice with traditional systems. That’s the selling point of the DMI: a hybrid model where digital and legacy finance can coexist. But coexistence isn’t the same as equality. The LSEG isn’t handing over the keys to the kingdom; it’s integrating blockchain on its own terms. And then there’s the regulatory tightrope. Blockchain thrives in permission-less environments, but the LSEG operates in a world of KYC (Know Your Customer), AML (Anti-Money Laundering), and strict oversight. The DMI platform is regulated, meaning it’s not the wild west of DeFi—it’s more like a gated community with blockchain plumbing. That might make traditional investors feel safer, but it also means some of the revolutionary potential of decentralization gets left behind. The real test will be who gets to participate. If the DMI just becomes another tool for hedge funds and private equity firms to move money faster, then the experiment fails in its most ambitious promise: opening up finance to the masses. But if it lowers minimum investments, increases transparency, and lets smaller players into the game, then maybe—just maybe—this is the start of something bigger. Sources include: CoinTelegraph.com CoinTelegraph.com CoinTelegraph.com
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