LSE Group begins exploring blockchain for traditional financial assets

The LSE Group, which stands for London Stock Exchange Group, has said that it is venturing out to explore the possible use cases of blockchain technology for traditional financial assets. Blockchain technology is known to support crypto assets like BTC and ETH. However, the Group is in talks to leverage the potential of it for the benefit at a level where everyone can have access to the benefits that it brings.

A spokesperson from LSE has said that their attempts are to make the process smooth, slick, and more transparent while having it under all the relevant regulations. If implemented, expectations are that the Group will have improved efficiency, holding capability, and better transaction settlement.

Murray Roos, the Head of Capital Markets at the Group, has said that they have been examining the capabilities of blockchain technology for more than a year, adding that they are introducing the same to the public only after reaching an inflected point.

A report is making rounds on the internet claiming that LSE will even create a separate legal entity prior to the implementation of the new mechanism. It is most likely that the upgraded mechanism will go live next year. Till then, LSE is in talks with various stakeholders to gather as much input as possible. Stakeholders here include jurisdictions, regulators, and relevant Government departments.

This is a development that was expected to happen. Many traditional financial institutions, or mainstream traditional financial institutions, were earlier talking about the advancements that blockchain technology can bring if implemented in the sphere, mostly for issuing and trading financial assets.

There is no word on making any advancement when it comes to cryptocurrencies. It is only a fact that traditional financial institutions are ready to consider giving blockchain technology a try for the benefit of their customers. Blockchain is a ledger that helps record and verify transactions.

There is a chance that crypto transfers could be affected in the UK as its Travel Rule comes into effect. The aim of the rule is to prohibit money laundering and financing terror-related activities. It is live as of September 01, 2023. The rule was first brought up by the Financial Conduct Authority in the middle of August. Specifically speaking, it was introduced on August 17, 2023, seeking UK-based Virtual Asset Service Providers to collect and verify all the pieces of information, especially those that are related to the transfer of crypto-assets.

A risk-based assessment by authorities enters into the picture only if a crypto asset is transferred inbound by a person from a region that has not implemented the Travel Rule yet. It is after the assessment has been done that the beneficiary receives their fair share of the transfer in the account or digital wallet.