Blockchain for Banking Capital markets

Deutsche Börse, Swisscom to launch Swiss digital asset exchange this year


Deutsche Börse, Swisscom and one of its IT providers Sygnum plan to jointly create a compliant digital asset exchange in Switzerland using blockchain. Last week SIX which runs the Swiss Stock Exchange confirmed it’s using R3’s Corda for its digital asset exchange. Both platforms aim to launch this year.

Swisscom is Switzerland’s biggest telecoms company. In addition to being the largest cellular provider, it also provides IT solutions to the Swiss banking sector including for payment processing, securities processing and securities data management.

In today’s announcement, the companies highlight the potential for asset digitization and tokenization to “reshape” the financial markets. Hence they plan to use distributed ledger technology for the issuance of digital assets, custody, market making and banking services. Most importantly they plan to do so in a regulatory compliant manner.

Looking at those features as building blocks, Swisscom has two existing blockchain subsidiaries in which Deutsche Börse will invest. Custodigit is a digital asset custody solution created as a joint venture with Swiss/Singapore-based Sygnum.

Additionally, Swisscom’s daura AG subsidiary caters for SME companies to transfer and register Swiss securities, to enable non-listed companies to access capital markets.

Deutsche Börse will invest in Custodigit, and both Deutsche Börse and Sygnum will buy part of daura so that both companies will become 3-way joint ventures.

Deutsche Börse and Sygnum are at the early stage of planning a listing and trading venue for digital assets focused on the Swiss market.

“This cooperation, the complementary infrastructure and expertise of the parties involved, is a great opportunity for creating a comprehensive and market leading ecosystem for digital assets,” said Jens Hachmeister, Managing Director, DLT, Crypto Assets and New Market Structure, Deutsche Börse.

“With Swisscom and Sygnum we have two highly recognized partners on board and we are looking forward to bundle forces. Continuing our investments in new technologies and driving the development around DLT forward is a key focus of Deutsche Börse Group. Switzerland, known to be a nucleus for financial markets innovation, is the ideal starting point for Deutsche Börse to drive this evolution forward.”

The Deutsche Börse has been active in blockchain for some time. It’s an investor in Digital Asset and HQLAX, the Corda-based platform for trading highly liquid assets between financial institutions. Last week in a proof of concept Deutsche Börse paid tokenized cash to Commerzbank in exchange for tokenized stocks as part of a repo agreement.

To execute the vision will require a Swiss banking and securities dealer license from regulator FINMA and the plan is for Sygnum to apply for the registration. So Sygnum will provide “custody, deposits, credit & lending, capital issuance via tokenization, brokerage and asset management within the digital asset ecosystem.”

The deal is subject to regulatory (merger) clearance.

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