LSEG to Launch On-Chain Settlement Platform for Institutional Markets

London Stock Exchange Group (LSEG) has outlined plans to introduce an on-chain settlement capability through a new market infrastructure solution, the LSEG Digital Securities Depository (DSD), targeting institutional participants.

The proposed DSD is intended to enable interoperability between traditional settlement systems and digital infrastructure. Market participants would be able to transfer assets across conventional and blockchain-based environments and interact with multiple distributed ledger networks. LSEG said the first phase of the solution is expected in 2026, subject to regulatory approval.

The initiative builds on LSEG’s existing Digital Markets Infrastructure (DMI), a distributed ledger technology (DLT) platform developed in collaboration with Microsoft Azure. The DMI has already supported tokenisation and fund distribution processes.

According to LSEG, the DSD is designed to enhance collateral management and improve liquidity access across asset classes, including fixed income, equities, and private market instruments. The group indicated that the platform forms part of a broader strategy around tokenised securities.

LSEG said its long-term vision includes a market structure in which a significant portion of bonds — and potentially other securities — are issued and settled in tokenised form. By introducing on-chain settlement functionality, the group aims to streamline post-trade processes, reduce operational friction, and increase transparency while maintaining compatibility with existing financial market infrastructure.