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The London Stock Exchange Group has drawn up plans for a new digital markets business, saying this will make it the first major exchange to offer extensive trading of traditional financial assets on the blockchain technology best known for powering cryptocurrency.

Murray Roos, head of capital markets at the LSE Group, told the Financial Times that the company had been examining the potential for a blockchain-powered trading venue for about a year, and had reached an “inflection point” where it had decided to take the plans forward. It has asked Julia Hoggett, head of the London Stock Exchange, one unit in the broader group, to spearhead the project.

Roos stressed that his exchange was “definitely not building anything around cryptoassets” but was looking to use the technology that underpins popular tokens such as bitcoin to improve the efficiency of buying, selling and holding traditional assets.

“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.

He added that LSEG had waited to proceed until it was sure that the public blockchain technology was “good enough” and that investors were ready.

The move by LSEG comes as a host of mainstream financial institutions talk up the potential for the blockchain — a digital ledger that records and verifies transactions — to streamline the process of issuing and trading financial assets, which often relies on cumbersome and frequently manual processes. Much of this hinges on so-called tokenisation, the process of creating digital representations of stocks or bonds whose ownership can be tracked on the technology.

Larry Fink, chief executive of BlackRock, earlier this year said “the next generation for markets” lay in the tokenisation of assets.

If its plans come off, Roos said the LSEG would be the first large global stock exchange to offer an “end to end” blockchain-powered ecosystem to investors. Many other blockchain-powered projects have covered only part of the lifecycle of financial assets, rather than everything from issuance to trading, reconciliation and settlement.

Roos added that the digital markets venture would not be a competitor to LSE’s traditional business, and its development was not an attempt to shore up its equities markets business, which has suffered in recent years as initial public offerings have dried up. “We’re very committed to the London equity markets,” Roos said. “What we are seeking to do is continue to do what London has always done and continue to innovate.”

LSEG, which is considering using a separate legal entity for the digital markets business, hopes to have the first market up and running within the next year, subject to regulatory approval. It is already in talks with regulators in multiple jurisdictions, as well as the government and Treasury in the UK.

“The ultimate goal is a global platform that allows participants in all jurisdictions to be able to interact with people in other jurisdictions completely abiding by rules, laws and regulations, potentially multiple jurisdictions simultaneously, which is something that hasn’t been possible in an analogue world,” Roos said.

He offered as an example a transaction involving a Swiss buyer, Japanese asset and American seller which would be “very difficult” to do with older technology but could be easily accomplished in a digital world if LSE can get buy-in from multiple regulators.

Roos said the digital business was likely to focus on private markets initially since activity there was particularly cumbersome and opaque. Once LSEG has proved the model there, it will expand it to other assets.

“The technical opportunity of digitising a bunch of traded asset classes is extremely high,” Roos said.

Data from the European securities regulator Esma on Thursday showed that just $800mn of traditional assets had been tokenised — or put on the blockchain — so far.