Murray Roos, head of capital markets at the LSE Group, told the FT the firm had decided to push forward with the project after 12-months of internal debate on the potential for a blockchain-powered trading venture, adding it is now in conversations with the UK government and regulators on the idea.
The project would be lead by the group's CEO Julia Hoggett.
Roos told the newspaper this was "definitely not building anything around cryptoassets", but instead was focused on the technology that underpins popular crypto-tokens to improve the efficiency of buying, selling and holding traditional assets.
US court rules SEC improperly rejected bitcoin spot ETF
Blockchain is the powerhouse of cryptocurrency, the latter of which cannot be traded on listed trading platforms yet. Several major asset managers have applied for licenses to launch spot-bitcoin ETFs, including BlackRock, Fidelity and Invesco, but have been rejected by US regulators.
However, last week's decision in the US over the trading of crypto-related assets took a step forward, with a court ruling the regulator improperly rejected a bitcoin spot ETF, now potentially opening the door for the launch of a variety of bitcoin-focused products.
"The idea is to use digital technology to make a process that is slicker, smoother, cheaper and more transparent . . . and to have it regulated," Roos said.
A spokesperson for LSEG told Investment Week: "LSEG is exploring plans to build an end-to-end digital market ecosystem that will allow for the raising and transfer of capital in a more seamless, cost efficient way across asset classes."