LSEG EMBRACES BLOCKCHAIN

LONDON Stock Exchange Group (LSEG) said yesterday it had invested in a start-up that lets companies issue debt on blockchain, signalling growing interest from mainstream finance in the technology behind cryptocurrencies. LSEG led a $20 million (R277.4m) investment round in London-based Nivaura, paying an undisclosed sum for a minority stake, the two companies said in a statement. Nivaura, a digital platform used for issuing and administering corporate bonds, loans and equity, was behind the world’s first automated cryptocurrency-denominated bond issuance in November 2017. The platform enables financial instruments to be settled on existing clearing infrastructure, or as digital tokens that are recorded on public blockchain – the distributed ledger technology behind cryptocurrencies such as bitcoin and ethereum. Nikhil Rathi, LSEG’s head of international development, told Reuters that LSEG was seeking to leverage technology to develop new products, boost efficiency and support growth. The investment by LSEG is the latest in a small but growing trend of major financial firms embracing blockchain related technologies, party in the expectation they will upend issuance, settlement and trading processes in the financial sector. Issuing bonds and equities currently requires multiple steps and the involvement of multiple parties, making it an expensive and inefficient process. Nivaura says it can slash the time from issuance to market for financial instruments by up to 80 percent. Proponents say the “tokenisation” of debt and equity could dramatically cut costs for raising capital. I Reuters