With the incorporation of blockchain, the London Stock Exchange (LSE) Group aims to revolutionize traditional asset trading. In efforts that have spanned over a year, the group has finally come to the point where the practical implementation of their blockchain visions looks to be a feasible reality. Eschewing the world of cryptocurrencies, the plan is to utilize blockchain technologies to optimize the efficiency of buying, selling, and holding traditional assets.
This new digital format proposes a smoother, slicker, cheaper, and more transparent process for traditional assets, remarks Murray Roos, LSE Group’s head of capital markets. Additionally, the new system will be fully regulated to ensure the utmost reliability for investors. Notably, if the project is successful, LSE would be the first major global stock exchange to provide an end-to-end blockchain-powered ecosystem to investors.
This plan has been on hold until two main prerequisites have been met: public blockchain technology being adequate for the task, and investors being ready to embrace this new format. The question is, however, can blockchain technology truly revolutionize traditional asset trading without compromising on security and trustworthiness?
Looking elsewhere in the market, other traditional financial institutions are starting to consider integrating blockchain technology into their operations. On August 31, SWIFT, the bank messaging network, released a report discussing how blockchain could be used to solve the issue of interoperability between various blockchain networks. Even the aviation industry is embracing blockchain. Lufthansa Airlines launched a blockchain-based nonfungible token (NFT) loyalty program on Polygon network in August, rewarding NFT holders with benefits like flight upgrades and lounge access.
Nevertheless, one can’t ignore the skepticism looming around blockchain’s application in traditional markets. The industry can be prone to hacking, and security remains a major concern. The openness of the blockchain, while offering transparency, might also be a potential vulnerability. Equally, the practicality of legacy systems working effectively with new blockchain technologies is yet to be proven.
Overall, this endeavor brings an exciting transformation offering substantial advantages. However, the transition is not without its fair share of hurdles and potential pitfalls. The integration of traditional finance and pioneering blockchain technology opens up new roads for the future, but the journey might not be a smooth one. Time alone can reveal the viability of this fusion. It is certainly a development to keep an eye on.
Source: Cointelegraph
