London Stock Exchange Group said Thursday it will build a new on-chain settlement system for institutional investors.
The service will be called the LSEG Digital Securities Depository. It will connect traditional securities markets to blockchain networks. The goal is simple. Large institutions will be able to trade and settle tokenized bonds, stocks and assets in the private market using blockchain technology, while remaining connected to existing infrastructure.
The system will work on various blockchain networks. It remains compatible with current settlement platforms already used by banks and asset managers.
LSEG said the first results are planned for 2026, but need regulatory approval first. The company already operates a blockchain platform for private funds, powered by Microsoft Azure. This new building expands that digital push.
Elliott is increasing the pressure now that the banks support the digital plan
The announcement comes as LSEG faces pressure from activist hedge fund Elliott Management. Elliott has built up a significant 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 push for better financial performance.
Shares in LSEG have fallen more than 35 percent in the past year. The stock was also hit amid a broad sell-off at global data and software companies linked to fears that new AI tools could harm existing business models. Shares rose 0.9 percent on Thursday. The company also faces a weak stock exchange listing in the United Kingdom.
Elliott has encouraged LSEG to consider launching a multi-billion pound share buyback once a £1 billion tranche is completed. The hedge fund also wants the company to close the margin gap with competitors. LSEG trades at a lower valuation than peers such as Moody’s and CME Group.
In a statement on Wednesday, LSEG said: “LSEG maintains an active and open dialogue with our investors as we remain focused on executing our strategy.”
While many still see it primarily as an exchange operator, LSEG changed its structure after acquiring Refinitiv for £22 billion in 2019. That deal turned it into a financial data and analytics company. LSEG also owns a stake of around £10 billion 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 depot. The goal is to build an ecosystem where institutions with different payment methods can transact between digital and traditional markets in different time zones.
Support for the plan has come from major UK banks and financial groups. Barclays, Lloyds, NatWest Markets, Standard Chartered and Brookfield have welcomed LSEG’s decision.
The new repository places LSEG deeper into blockchain-based settlement. It links tokenized assets to established financial pipelines.
The first phase is expected in 2026 if regulators approve. For now, LSEG is building the framework while managing investor pressure and market volatility.