A group of Swiss banks, Credit Suisse, Pictet and Vontobel, have issued tokenized investment products on the Ethereum blockchain testnet and settled transactions with fiat currency. The tokenized securities were traded on BX Swiss, the FINMA-regulated Swiss securities exchange and subsidiary of Börse Stuttgart.
The benefits of using blockchain include efficiencies resulting in lower costs. Because settlement is invariably faster or instant, counterparty risks are reduced. And in this case, the added nuance is the use of a public blockchain that can potentially enable greater liquidity because of ease of access.
One of the promises of blockchain is to cut out the middleman. However, regulations in many countries don’t allow this for securities. Neither a central counterparty (CCP) nor a central securities depositary (CSD) was involved in these transactions.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
