This chapter introduces a blockchain-based Local Energy Market (LEM) among networked microgrids (MGs). The MGs submit their trading data to the centralized distribution system operator (DSO), which optimizes these transactions to ensure network security. The DSO considers various options, including hourly demand response, on-site MG generation, and trading with the independent system operator (ISO), to maximize MG profits while maintaining network constraints. A cooperative game with externalities models the collaborative behavior among MGs in the market. A two-stage problem is formulated to distribute the grand coalition’s payoff among participating MGs. The problem is solved using a column-and-constraint generation (C&CG) method combined with Karush–Kuhn–Tucker (KKT) conditions, offering superior computational efficiency. Blockchain technology ensures secure, transparent settlement, and market operations for the proposed LEM. The approach is tested on a 4-MG network, the IEEE 33-bus system, and the IEEE 123-bus system, demonstrating its effectiveness in encouraging MGs to trade energy and carbon allowances while adhering to network constraints.