The platform is being built and tested by Borsa Italiana, the LSEG’s Italian exchange operator, and will seek to make it easier to track and exchange shareholder information of unlisted businesses, the companies said on Wednesday.
Blockchain, which first emerged as the system powering the cryptocurrency bitcoin, is a shared record of information that is maintained by a network of computers on the internet, without the need of a trusted third party.
Information on a blockchain can be viewed by all parties connected to the network but can only be amended if each participant agrees to the changes. This creates a shared golden source of data that can reduce the need for reconciliation between records held by different companies.
Information on shareholders of small and medium enterprises has traditionally been maintained manually on spreadsheets or even on paper-based records, with each party holding their own version of information.
A shared digital ledger would make it easier for companies to interact with their shareholders and provide more transparency on their ownership, LSEG said.
“As these companies grow they will be better at interacting with their shareholders,” David Harris, head of emerging technology at LSEG, said in an interview.
The exchange group hopes that the new technology, which is built using a type of blockchaincalled HyperLegder Fabric, will also make it easier for companies to access credit.
HyperLedger Fabric was recently released by Hyperledger, an open-source group led by the Linux Foundation whose members also include IBM and LSEG.
For more on blockchain, watch Fortune’s video:
Financial institutions have been increasing their investment in blockchain over the past few years in the hopes that it can help reduce the cost and complexity of some of their processes.
While excitement around the technology has boomed, skeptics have warned that it is still in its early days and its potential may have been overblown.
The new platform, which was built to work with the group‘s existing systems, is undergoing an initial test phase with a small group clients and partners, LSEG said.