A Reuters report says that The London Stock Exchange Group (LSEG) has invested in Nivaura, a startup that lets companies issue debt on blockchain. LSEG led a £15 million investment round in the London-based company, paying an undisclosed sum for a minority stake. There is a growing trend of financial companies embracing blockchain technology with other major firms, such as Santander, investing in this platform.
The LSEG have invested in Nivaura’s second seed extension round and the raised funds will be used to increase headcount “significantly across all areas” and for expansion into the US and Asia. Nivaura was behind the world’s first automated crypto-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 blockchains, automating the life cycle of financial bonds, equities, derivatives etc. Issuing bonds and equities currently requires multiple steps and the involvement of numerous parties, making it an expensive and inefficient process, but Nivaura says it can cut the time from issuance to market for financial instruments by up to 80 percent.
LSEG Leveraging Blockchain Technology To Support Growth
Turning financial instruments into instantly tradable tokens could cut costs for raising capital, particularly for smaller businesses who are trapped in having to approach commercial lenders.
This is not the LSEG’s first foray into cryptocurrency and blockchain projects. In January, it said a Hong Kong-based crypto exchange would use its matching system for trading digital coins and in 2017 it worked with IBM to build a blockchain-based platform to digitally issue private shares of small and medium enterprises in Italy.
The LSEG also has older ties with Nivaura having worked with them on issuing tokenized securities as part of the regulatory sandbox programme of the Financial Conduct Authority.
Nikhil Rathi, Head of International Development at LSEG said that LSEG was “seeking to leverage technology to develop new products, boost efficiency and support growth”.
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