London Stock Exchange Group announced on Thursday that it will build a new on-chain payment system for institutional investors.
This service is called “LSEG Digital Securities Depository”. Connect traditional securities markets to blockchain networks. The goal is simple. Large institutions will be able to trade and settle tokenized bonds, equities, and private market assets using blockchain technology while maintaining links with their existing infrastructure.
The system works across multiple blockchain networks. It also maintains compatibility with current payment platforms already used by banks and asset managers.
LSEG said first deliverables are planned for 2026, but regulatory approval is required first. The company already operates a blockchain platform for private funds powered by Microsoft Azure. This new build expands on that digitalization push.
Elliott steps up pressure as banks back digital plans
The announcement comes as LSEG faces pressure from activist hedge fund Elliott Management. Elliott built up a large stake in the company. The fund is run by billionaire Paul Singer.
Elliott manages approximately $76 billion in assets. The company has been working with LSEG and its CEO David Schwimmer to improve its financial performance.
LSEG stock has fallen more than 35% over the past year. Stocks also took a hit when global data and software companies fell sharply on concerns that new AI tools could harm existing business models. The stock rose 0.9% on Thursday. The company is also dealing with a weak UK listing market.
Mr Elliott encouraged LSEG to consider launching a multi-billion pound share buyback once the £1 billion tranche is completed. Hedge funds also want the company to narrow the margin gap with rivals. LSEG trades at a lower valuation multiple than competitors such as Moody's and CME Group.
“LSEG remains focused on executing its strategy while maintaining an active and open dialogue with investors,” LSEG said in a statement Wednesday.
Although many see LSEG as still primarily a stock exchange operator, LSEG changed its structure after acquiring Refinitiv for £22bn in 2019. The transaction turned the company into a financial data and analytics company. LSEG also holds an approximately £10bn stake in electronic trading platform Tradeweb.
The company said it will form a strategic partner group to gather feedback from market participants during the development of the depository. The aim is to create an ecosystem where financial institutions can trade between digital and traditional markets across time zones using different payment methods.
The plan has received support from major UK banks and financial groups. Barclays, Lloyds, NatWest Markets, Standard Chartered and Brookfield have welcomed LSEG's decision.
The new custodian will deeply integrate LSEG into blockchain-based payments. Connect tokenized assets with established financial plumbing.
If approved by regulators, the first phase is expected to begin in 2026. For now, LSEG is building a framework while simultaneously managing investor pressure and market volatility.
