London Stock Exchange Unveils Blockchain Platform for Asset Tokenization

According to Bloomberg, the first practical implementation was the tokenization of the MCM Fund 1 fund created by MembersCap. The transaction was carried out using the regulated digital asset platform Archax, which provided formal support for the transaction.

The LSE explained that the blockchain allows optimizing the infrastructure of private markets, which are considered one of the most promising areas for further digitalization. So far, the system works exclusively with closed-end funds, but the exchange plans to expand its capabilities to other asset classes.

Tokenization, as experts note, is the process of converting real assets — from stocks and bonds to credit obligations — into digital form on the blockchain. This approach allows for faster settlements, lower costs and increased liquidity, and also opens up access to a larger number of investors through the mechanism of fractional ownership.

Although regulators, banks and large corporations are increasingly showing interest in tokenization, the market remains relatively small. It is significantly inferior in volume to such traditional instruments as mutual funds and ETFs, whose assets are estimated at trillions of dollars. Nevertheless, analysts predict an increase in interest in this technology as it is introduced into the institutional sector.

Earlier, it was reported that BlackRock is also considering the possibility of converting its exchange-traded funds to a tokenized format, which could give additional impetus to the development of the new segment.

Thus, the LSE initiative reflects the general trend towards integrating blockchain into traditional finance. If the project is further developed, this could be an important step in the formation of a global market for tokenized assets.