London Stock Exchange Group rolls out blockchain platform for tokenized private funds

The London Stock Exchange Group has launched a blockchain-based platform to help private funds issue and settle tokenized assets as traditional finance increasingly adopts onchain technology.

LSEG’s Digital Markets Infrastructure (DMI), built on Microsoft Azure, aims to let private-market issuers create and service tokenized instruments while keeping them within existing regulatory perimeters.

MembersCap, a Bermuda-regulated investment manager, has already used the system to raise capital for its tokenized MCM Fund 1, with London-regulated exchange Archax acting as nominee, according to a Monday statement. LSEG officials said it's the first phase of a broader push that could extend to other asset classes.

Tokenization trend

Major market operators and legacy firms are moving from pilots to production for tokenized finance, where traditional securities are represented on blockchains to streamline issuance, trading, and settlement. “There are many processes in private markets today that can be improved,” said Dr. Darko Hajdukovic, head of DMI at the LSEG. Advocates argue that tokenization can reduce back-office costs and increase access, offering improved liquidity rails and 24/7 trading.

Issuers like BlackRock and Franklin Templeton offer money market products on blockchains, with billions of dollars in assets under management spread across Ethereum and other networks, The Block’s data dashboard shows.

The LESG’s rollout also comes on the heels of Nasdaq’s filing with the U.S. Securities and Exchange Commission to allow tokenized securities to trade alongside conventional shares on the same order book if certain conditions are met. The landmark proposal could go live as early as 2026 if approved.

Even as listings and pilots multiply, some large banks like JPMorgan have argued real-world asset deployment remains slower than the hype suggests, with scale still a work in progress.

Still, analysts at Standard Chartered say the RWA sector would balloon to around $30 trillion by 2034. The Block’s data dashboard shows over $13 billion in total value locked across RWA products and protocols as of Sept. 15.