London Stock Exchange launches £1.2 trillion Microsoft-backed private fund market on blockchain
John: Hey everyone, I’m John, a veteran writer for Blockchain Bulletin, where I break down the latest in Web3, crypto, and blockchain in simple terms that anyone can grasp. Today, we’re diving into the exciting launch of a blockchain-based private fund market by the London Stock Exchange, backed by Microsoft—it’s a big step toward blending traditional finance with blockchain tech. For readers who want a full step-by-step guide, you can also check this exchange guide.
Lila: Hi, I’m Lila, John’s curious assistant always eager to learn more about this crypto world. John, what’s the big deal with the London Stock Exchange using blockchain for private funds—does this mean everyday investors like me can get involved easier?
Basics of the Launch
John: Great question, Lila. On 2025-09-15, the London Stock Exchange Group (LSEG) officially launched its Digital Markets Infrastructure (DMI) platform, a blockchain-based system for private funds. This Microsoft-backed initiative aims to handle everything from issuing funds to subscriptions, register maintenance, and post-trade services all in one seamless setup.
Lila: Blockchain? I know it’s the tech behind Bitcoin, but how does it fit here with stocks and funds?
John: Think of blockchain like a super-secure digital ledger that everyone can verify but no one can tamper with—kind of like a shared notebook where entries are locked in stone. In this case, it tokenizes private funds, making them easier to trade and manage without the usual paperwork hassles. The platform’s first transaction involved MembersCap, a reinsurance asset manager, and Archax, a digital asset exchange, marking a real-world debut.
Background and Development
John: In the past, private funds were often illiquid and bogged down by manual processes. LSEG started exploring blockchain solutions around 2023, partnering with Microsoft to build this on Azure technology. As of now, on 2025-09-15, they’ve gone live with a platform that could potentially manage £1.2 trillion in assets if fully adopted.
Lila: Illiquid? That sounds like my morning coffee when it’s too thick—hard to pour! So, how does blockchain fix that?
John: Haha, good one, Lila—yeah, illiquid means hard to buy or sell quickly. Blockchain enables tokenization, turning fund shares into digital tokens that can be traded faster and more transparently. This builds on earlier experiments, like the UK’s regulatory sandbox tests in 2024, which paved the way for safer adoption.
Current Landscape
John: Right now, the platform is focused on private funds, but LSEG plans to expand to other asset classes soon. According to recent reports from CoinDesk and Cointelegraph, even a 5% adoption rate could move £60 billion in assets onto the chain. The first clients, MembersCap and Archax, have already completed a transaction, showing it’s not just talk—it’s operational as of 2025-09-15.
Lila: That’s huge! Are other big exchanges doing something similar?
John: Absolutely—think of how the Swiss SIX exchange tokenized bonds back in 2021, or Nasdaq’s blockchain pilots. But LSEG’s move is groundbreaking for the UK, merging traditional finance (TradFi) with decentralized finance (DeFi) in a regulated way. It’s backed by Microsoft Azure, ensuring scalability and security.
Use Cases and Examples
John: One key use case is improving liquidity for private markets. For instance, investors in private equity funds can now trade tokenized shares more easily, reducing settlement times from days to minutes. Another is cost savings—blockchain cuts out middlemen, potentially lowering fees by up to 20-30% based on industry estimates from sources like Yahoo Finance.
Lila: Can you give me some concrete examples of who might benefit?
John: Sure! Here’s a quick list of potential users:
- Asset managers like MembersCap, who can issue and manage reinsurance funds on-chain.
- Institutional investors seeking faster trades in private markets.
- Digital exchanges like Archax, facilitating tokenized asset transactions.
- Even smaller funds looking to go global without massive overhead.
John: (And hey, if this takes off, it might make investing feel as easy as ordering pizza online—no more waiting for the delivery guy to show up late!)
Risks and Safeguards
John: While exciting, there are risks like cybersecurity threats or regulatory hurdles. Blockchain isn’t immune to hacks, as we’ve seen in past incidents like the 2022 Ronin bridge exploit. LSEG is addressing this with Microsoft-backed security and compliance with UK Financial Conduct Authority rules.
Lila: That sounds scary—how do they keep things safe?
John: They use enterprise-grade blockchain on Azure, with features like encrypted ledgers and smart contracts for automated checks. Plus, it’s all under regulatory oversight, so no Wild West scenarios. Remember, this is about controlled innovation, not speculation.
Looking Ahead
John: Looking ahead, LSEG aims to add more asset classes by late 2026, potentially including real estate or debt instruments. If trends continue, we could see tokenized markets growing to $30 trillion globally by 2030, per some Cointelegraph analyses. This could democratize access, but it’ll depend on broader adoption and tech advancements.
Lila: Will this change how regular people invest in the future?
John: Possibly—imagine buying fractional shares of private funds via apps, but always with proper regulations in place. It’s a bridge to a more efficient financial world, starting from this 2025 launch.
John: Whew, that covers the launch of LSEG’s blockchain platform—it’s a promising blend of old-school finance and cutting-edge tech that could make markets more accessible. Thanks for joining the chat, folks; stay curious and keep exploring safely. And if you’d like even more exchange tips, have a look at this global guide.
Lila: Totally agree—blockchain is making finance feel a bit less mysterious. Excited to see where this goes!
This article was created using the original article below and verified real-time sources:
- London Stock Exchange launches £1.2 trillion Microsoft-backed private fund market on blockchain
- London Stock Exchange Unveils Blockchain-Based Platform for Private Funds
- London Stock Exchange Group Debuts Blockchain Platform For Private Funds
- LSEG launches Digital Markets Infrastructure platform for private funds, and facilitates first transaction