London Stock Exchange to Provide Trading Tech for New Crypto Exchange

London Stock Exchange cryptocurrency blockhain Hong Kong ATOM Group AAX platform

The London Stock Exchange is to provide the technology for matching trades to a soon-to-be-launched cryptocurrency exchange in Hong Kong, in the latest example of a mainstream financial services company embracing the cryptocurrency sector.

In an announcement on Tuesday, the LSE Group said it would be working with Hong Kong’s ATOM Group to develop the technology that will power their AAX platform, which will become the first crypto exchange of its kind to use LSE trade matching technology.

The platform will be powered by LSE’s Millennium Exchange engine, which will provide traders with industry-leading technology to build a trusted, stable platform. The AAX exchange is scheduled for launch later in 2019.

ATOM Group CEO Peter Lin described Millennium Exchange as providing a “safe, trusted and secure” platform for buying and selling, both for retail and institutional customers. He noted that the platform would also ensure scalability, as well as compliance, for the new exchange from launch.

The group confirmed it would also be working with crypto security firm Kroll in a bid to protect its platform from hacks and thefts that have plagued other platforms.

The move reflects a growing trend from crypto exchanges pushing toward technology from traditional exchanges, building on the expertise, experience and trust of more established incumbents.

In April 2018, the Gemini platform announced a tech partnership with Nasdaq, which allows the exchange to use Nasdaq’s SMARTS Market Surveillance software to identify potential market abuse and price manipulation.

Similarly, the recently launched DX.Exchange chose Nasdaq to power its matching engine, in a bid to capitalize on the proven track record of Nasdaq technology in regulated markets.

While LSE has been actively investigating blockchain tech in its own right for several years, the group has yet to roll out any specific applications.

However, a trial is already underway, in partnership with IBM, which is seeking to explore tracking securities ownership and capital structures for SMEs, which could ultimately lead to the first major deployment of distributed ledger technology at the exchange.

The move comes at a time of intensifying efforts from crypto exchanges as they continue to court institutional investors by developing secure, compliant platforms.