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London Stock Exchange Group Launches New Tokenization Platform With Microsoft

TL;DR

• The London Stock Exchange Group launched Digital Markets Infrastructure in collaboration with Microsoft to tokenize financial assets and modernize private markets.
• The first transaction was carried out with MembersCap’s tokenized MCM Fund 1, with Archax acting as a regulated nominee and EJF Capital among the early participants.
• LSEG will integrate DMI into Workspace to give managers direct access to private investments, aiming to expand the platform to bonds, commodities, and equities.

The London Stock Exchange Group launched a new digital infrastructure platform called Digital Markets Infrastructure (DMI), developed jointly with Microsoft and operated on Microsoft Azure.

The objective is to modernize private markets through the tokenization of funds and financial assets, providing greater efficiency, transparency, and accessibility for professional investors. The platform covers the full asset lifecycle, from issuance and distribution to post-trade settlement, and is designed to operate interoperably with traditional financial infrastructure and solutions based on distributed ledger technology.

The first transaction was executed through MembersCap, which raised capital for its tokenized MCM Fund 1. Archax, a digital exchange regulated by the Financial Conduct Authority, acted as nominee, ensuring regulatory compliance and institutional support. EJF Capital was also onboarded as one of the first participants and will make several of its funds available on the new infrastructure.

The London Stock Exchange Aims to Modernize Traditional Markets

LSEG will integrate DMI into its Workspace system, allowing managers and professional investors to discover and analyze private market investment opportunities directly. These markets are historically illiquid and opaque, and tokenization seeks to address these limitations through fractional ownership and faster settlement. The exchange’s goal is to facilitate access to opportunities that were previously restricted and attract more capital to instruments that were difficult to reach in the traditional model.

Collaboration with Microsoft provides scalability and security to the system. According to the technology company, the initiative reshapes financial market infrastructure and opens new opportunities for institutional clients. LSEG confirmed it will continue expanding the platform to asset classes beyond private funds, including bonds, commodities, and equities.

Various reports estimate that tokenization of real-world assets could reach $16 trillion by 2030, with short-term Treasury bonds leading growth. Firms like Animoca Brands calculate that the potential market in traditional finance is around $400 trillion, making tokenization a growth avenue for banks, asset managers, and exchanges