London Metal Exchange (LME) said on Tuesday that it is exploring possible use cases of blockchain technology, during an industry event in Hong Kong.

According to Reuters, LME chief executive Garry Jones said that they are holding a lot of discussions around distributed ledger technology. He explained, "For warehouses, for anything where there are actual objects and structures, and collateral and a central counterparty there's a natural extension of possibilities for distributed ledger.”

Jones mentioned that they will make an official announcement soon after finding an application for blockchain technology.

He said, “We're working on it ... As soon as we feel there is an application, we'll announce it. It's likely to be in the warehouse or collateral space with a central counterparty.”

Last year, LME announced to accept the offshore version of the Chinese currency as collateral for trades at its clearing house. The move pointed out China's growing importance in the global commodity market and Yuan's growing importance in trade and margin settlement.

The London Metal Exchange is the world centre for industrial metals trading. Found in 1877, the Exchange provides producers and consumers of metal with a physical market of last resort and, most importantly of all, with the ability to hedge against the risk of rising and falling world metal prices.