Blockchain Summit London has provided some major insights into how some of the largest companies are planning on implementing blockchain technology. Michael Coletta of the London Stock Exchange discussed how blockchain will both improve their current systems and the London Stock Exchange answer to ICO’s.
The panel was focussed on answering the question “understanding the power of DLT’s to better serve customers” and included James Allerton Austin from Oracle, Mathias Lundoe Nielsen from Nustay, Gowthaman Ragothaman from Mindshare and Michael Coletta from the London Stock Exchange. With quite a diverse panel it provided some great ideas on how blockchain technology was going to impact their individual fields and how that would better serve customers.
London Stock Exchange answer to ICO’s
Michael Coletta is the lead blockchain architect & developer for the emerging tech at London Stock Exchange Group (LSE Group). Michael began by stating how the focus on blockchain for London Stock Exchange was to “facilitate capital raising for small and medium enterprises” going on to explain that you could say it is “London Stock Exchange’s answer to ICO’s”.
Michael stated the main focus was on ICO’s, given that they “run parallel to their industry”, providing “infastructure where there is none for small and medium enterprises to raise capital”. Which the London Stock Exchange already offer, Michael then explained “all of their focus” was on providing a “end-to-end digital asset issuance offering to the market” to facilitate SME to raise capital.
When questioned about how they can compete with ICO’s and as to whether ICO’s may be preferred given the frustrations over costs of raising money.
As the ICO markets have “matured” the overall costs of raising capital via a “compliant ICO” are rising. Which he stated if London Stock Exchange were to focus on the core strengths of blockchain it could be implemented to better serve customers and help SME to raise capital in a regulated environment.
Michael explained where blockchain should be focused is towards “digital asset representation” which can be a digital form of any asset. When applied to “capital raising it would be a digital representation of an equity or share” which would be directly redeemable. Michael believes that blockchain technology is distracting companies from their business and if too much effort is focused on blockchain technology, it can slow down the overall production. If applied to LSE in the short term he believes it can make the platform more efficient and eventually provide a way in which SME will be able to raise capital as oppose to doing this via an ICO.
Michael was finally asked what the London Stock Exchange is doing to make it cheaper to list on the London Stock Exchange. Michael explained that he cannot quote specifics but the LSE are looking at “lowering the cost for the issuer”. He stated that “if you look at “digitising the representation of the asset whether it is a bond or an equity” you can reduce costs as well as allowing immediate access to secondary markets.
It is clear that blockchain technology is going to play a huge role in the future of financial markets, not only will it reduce costs but can open up new ways in which capital can be raised. Time will tell if LSE group can provide a solution to the ICO.
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