Banking News Uncategorized

SIX launches prototype of digital exchange, blockchain securities depository

swiss stock exchange

Today, SIX Digital Exchange (SDX) launched a prototype version of its blockchain digital assets platform and distributed central securities depository (CSD). Swiss Stock Exchange owner SIX launched SDX to provide end-to-end digital asset trading, settlement, and custody service.

The prototype features digital security token issuance, live trading, and instant settlement. This trial run is to demonstrate the integration of a distributed CSD with the conventional model of a stock exchange. New features, like asset servicing and post-trade services, are slated for the second prototype to be released in the coming months.

The main benefit of blockchain is the nearly instant settlement of trades. This eliminates the risk of payment defaults, and there is no need to use the services of a central counterparty (CCP). This provides higher liquidity to digital assets, plus the immutability of blockchain guarantees transactions are credible. Members will also have a private key to hold their assets on the SDX blockchain.

“The launch of this prototype is a major milestone in creating a credible digital infrastructure for moving our industry forward. We are now one step closer to demonstrating the viability of our vision for the financial markets of the future and, ultimately, for the way people and businesses access capital,” said Thomas Zeeb, Chairman SDX and Member of the Executive Board at SIX.

The full launch has now been postponed to late 2020 due to regulatory and legal aspects. One of the reasons outlined by CEO Jos Dijsselhof was the plan to list tokenized Nestle and Novartis shares on SDX, which requires a change in the law.

On the technology front, SDX uses R3’s Corda to run its digital asset trading platform. The platform also takes a few features from the Swiss Stock Exchange. Traders get a similar portal, and the digital asset token issuance service uses the Exchange’s Connexor service.

SDX is also exploring other applications of the platform and recently revealed it is working with Citibank, JP Morgan and Credit Suisse.

Last month, Martin Halblaub stepped down as the CEO citing strategic differences. Halblaub wanted SDX to be independent, against the popular opinion of keeping it a part of SIX.