Comprehensive Analysis of the London Stock Exchange Group's On-Chain Settlement Plan: How Will the 2026 Digital Securities Custody Launch Impact the Crypto Market?

In mid-February 2026, the global financial markets received a significant signal. The London Stock Exchange Group (LSEG) officially announced that it is working on building an on-chain settlement service for institutional investors, named the LSEG Digital Securities Depository (DSD).

This is not just a simple technological upgrade but represents the first time that a traditional trading and settlement system with hundreds of years of history has opened its core infrastructure to multi-chain digital asset networks. LSEG plans to deliver the first phase of results in 2026, pending regulatory approval.

As a leading global cryptocurrency exchange, Gate has long been focused on the compliance evolution of institutional-grade digital assets. We believe this move by LSEG will profoundly influence the liquidity paradigm of tokenized bonds, equities, and private market assets over the next five decades.

Dissecting LSEG’s On-Chain Settlement Service: Not Disruption, but “Seamless Connection”

Contrary to the common market understanding of “full decentralization,” the DSD system introduced by LSEG demonstrates a highly pragmatic approach.

Core Architecture: Multi-Chain Compatibility and Traditional Integration

According to the disclosed technical roadmap, LSEG DSD will upgrade and iterate on Microsoft Azure’s existing blockchain infrastructure. The system will support multiple blockchain networks simultaneously while maintaining interoperability at the API level with traditional settlement platforms.

• Target Participants: Limited to banks, asset management firms, and other institutional participants; retail investors are not involved.
• Asset Scope: Tokenized bonds, tokenized stocks, private market fund shares.
• Technical Features: Support cross-timezone trading, hybrid settlement with multiple payment options.

The brilliance of this design lies in “stock compatibility”—institutions can access on-chain settlement without abandoning existing channels like SWIFT or Euroclear, operating in parallel.

Ecosystem Response: Barclays, Standard Chartered, Lloyd’s, and Others Have Entered

LSEG is not acting alone. Major UK financial giants such as Barclays Bank, Lloyd’s Banking Group, National Westminster Market, Standard Chartered, and Brookfield have publicly expressed support for the initiative.

Barclays’ head of digital assets, Ryan Hayward, commented, “This is a positive step forward in the UK market’s adoption of digital assets.” Endorsement from traditional top-tier custodians indicates that on-chain settlement is shifting from “geek experiments” to “institutional consensus.”

Strategic Significance: Low Stock Prices, Elliott Pressure, and the Trillion-Dollar Data Empire Dream

LSEG’s high-profile move into on-chain finance at this moment is driven not only by technological maturity but also by significant market capitalization management motives.

Pressure from Elliott

As of February 2026, LSEG’s stock price has fallen more than 35% over the past 12 months. Activist investor Elliott Management has accumulated a large stake and continues to pressure management to initiate a multi-billion-pound buyback program and narrow the valuation gap with Moody’s and CME.

Blockchain narratives have always been a high-premium theme in capital markets. Through the concept of “on-chain settlement,” LSEG maintains a compliant and stable image while signaling to the market its embrace of next-generation financial infrastructure.

From Exchange to Data Giant: The Final Piece

Since acquiring Refinitiv for £22 billion in 2019, LSEG has gradually transformed into a financial data and analytics powerhouse. The deployment of the DSD system will further strengthen its moat in alternative data and real-time settlement streams.

Accelerating Institutional Adoption: The Role of Bitcoin and Ethereum in the Asset Tokenization Wave

Although the underlying assets of LSEG’s on-chain settlement system are tokenized versions of traditional securities, its compatible architecture with public blockchains means mainstream crypto assets will play a vital role in liquidity pools.

As of February 13, 2026, Gate’s market data shows:

Bitcoin (BTC) Market Overview

• Spot Price: $66,580.7
• 24-Hour Trading Volume: $768.22M
• Market Cap: $1.31T (55.42% market share)
• 24-Hour Price Change: -1.19%

If LSEG’s institutional custody and settlement services are successfully implemented in 2026, it will significantly reduce compliance concerns for traditional sovereign wealth funds and pension funds regarding crypto collateral. Models project that Bitcoin’s median price in 2026 will be around $66,054.9, with a potential volatility range between $62,752.15 and $78,605.33. If tokenized government bonds and on-chain repo markets exceed expectations, Bitcoin’s network effects as the ultimate collateral will accelerate.

Ethereum (ETH) Market Overview

• Spot Price: $1,947.19
• 24-Hour Trading Volume: $205.33M
• Market Cap: $233.26B (9.80% market share)

Ethereum is currently the preferred issuance layer for tokenized US Treasuries and institutional-grade smart contracts. If LSEG’s multi-chain strategy includes the Ethereum ecosystem, ETH’s “interest-bearing asset” attributes will be re-priced by institutions. Current forecasts suggest an average price of about $1,936.98 in 2026. Looking ahead to 2031, if on-chain settlement becomes the standard for major European and American exchanges, ETH could reach a price level of $4,472.13.

Trend Analysis: Why 2026 Is the Turning Point Year for “On-Chain Settlement”?

LSEG is not the only exchange group betting on this track. However, as the first major European and American exchange to explicitly include mainstream stocks and bonds in on-chain settlement, its demonstration effect is significant.

Core values of on-chain settlement for institutions:

• Time Compression: Reducing T+2 settlement cycles to minutes or even instant.
• Transparency: Custody records on-chain are auditable, reducing operational risks.
• Collateral Liquidity: Fragmented assets can enter the repo market via tokenization.

For the crypto market, LSEG’s entry signifies that compliant stablecoins and regulated public chain nodes will become scarce resources in financial infrastructure over the next three years.

Conclusion: Embracing and Reshaping Tradition

As a bridge connecting the crypto world and traditional finance, Gate remains highly attentive to institutional blockchain applications. The birth of the LSEG Digital Securities Depository marks that on-chain settlement services have officially entered the strategic planning of top global exchanges.

We are at a fascinating crossroads: on one side, Bitcoin and Ethereum have undergone extensive market testing and cycles; on the other, traditional capital forces represented by the London Stock Exchange Group are carefully and firmly paving the way into the on-chain world.

2026 may not be the year when crypto assets replace traditional securities, but it is very likely to be the historic year when crypto settlement technology is fully integrated into the mainstream global financial “vascular system.”